LightSquared Buyer Backs Out

NEW YORK Centerbridge Partners will not be buying LightSquared out of bankruptcy, according to The Wall Street Journal,'s coverage of a Manhattan court proceeding Tuesday. LightSquared's spectrum was set to be auctioned off Dec. 11, with Dish as the lead bidder with a $2.22 billion offer. The auction was called off in light of a $3.3 billion offer from Centerbridge Partners, a New York investment firm, Bloomberg reported. Marci Ryvicker of Wells Fargo said Centerbridge's exit puts Dish back into the bidding.

Essentially it means that Dish has been re-established as the lead bidder for Lightsquared's assets, without having to increase its offer, she said in an investor note. Barring another firm or fund stepping in to take over' Centerbridge's proposal which we view as highly unlikely we would expect the original auction for Lightsquared to take place, beginning with Dish's stalking horse' bid of $2.2 billion.

LightSquared filed for bankruptcy in May of 2012 after nearly two years of trying to appease the global positioning system contingent. LightSquared holds spectrum licenses adjacent to that used for GPS in the band designated for satellite transmissions. LightSquared applied for and was granted a waiver by the Federal Communications Commission in 2010 to use the spectrum to create a wholesale, hybrid satellite-terrestrial wireless broadband network.

It would have been the first of its type in the nation, but test after test indicated the network would interfere with GPS operations, which are inherent in everything from in-car navigation systems to guided missile systems. LightSquared's signals were not actually bleeding into the GPS band, rather, GPS devices were not developed with filters capable of rejecting LightSquared signals. The company, funded by Phil Falcone's Harbinger Capital, fought unsuccessfully to rectify the situation.

Ryvicker said the auction likely will now take place on Thursday, Dec. 19.

We view today's news as the best possible outcome for Dish as it has regained its status as the frontrunner to acquire Lightsquared, without having to increase its bid, she wrote. At the end of the day, we think Charlie's bid will hold up, adding valuable spectrum to the company's portfolio. Charlie being Ergen, CEO of Dish.

In separate news, Dish announced that it would partner with Sprint to test wireless broadband in Corpus Christi, Texas.

See

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January 18, 2012 LightSquared Says GPS Tests Rigged'

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December 12, 2011 LightSquared's Travails Mount

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