Rocket Lab Lifted Iridium Bid Nearly 30% Amid Thin Competition; Analyst Points to AST SpaceMobile as Mystery Suitor — BigGo Finance

Rocket Lab raised its offer for Iridium Communications by nearly 30% during negotiations, while satellite communications consultant Tim Farrar said AST SpaceMobile may have been one of the mystery companies that explored a rival bid.

Rocket Lab and Iridium began discussions in December, with Rocket Lab starting due diligence in March, according to the merger filing. A day after Amazon announced its Globalstar acquisition on April 14, Rocket Lab offered $42.50 per Iridium share entirely in stock. It raised the proposal to $52 on June 3, which included $15 in cash and $37 in stock, before finalizing a $54 offer split evenly between cash and shares.

“What is remarkable about the deal is how Iridium was able to push Rocket Lab’s offer up by over 25% despite there being relatively little competition for Iridium’s assets,” Farrar said. The consultant also said the timeline supports his earlier, unconfirmed theory that Rocket Lab bid for Globalstar before leaving that process on Dec. 4 and pivoting to Iridium.

The merger filing does not identify the mystery bidders. Only one, dubbed Party A, submitted a firm rival offer of $41 to $45 per share entirely in cash. It declined to bid higher because it believed Iridium stock was trading at “elevated levels amid market speculation about a potential strategic transaction,” according to the filing. Farrar believes Party A was a private-equity firm.

Iridium adviser Evercore also contacted 10 potential strategic buyers. Four signed confidentiality agreements, but only Party B entered due diligence. Party B withdrew two weeks later without making an offer and would have required a “strategic partner” to pursue Iridium, the filing said. Farrar identified AST SpaceMobile as the most plausible company behind Party B, arguing that AST would have needed support from one or more telecom companies. He believes Party C, which contacted Iridium but declined to bid, was likely Viasat. None of the bidders’ identities has been confirmed.

Insider Sales Coincide With Deal Progress

Separately, five Rocket Lab executives sold a combined $5.49 million worth of shares to cover taxes on vested stock awards, as the company’s Iridium acquisition advanced and CEO Peter Beck hinted at a substantial portfolio of undisclosed national-security programs.

The executives collectively sold 78,843 shares on Monday at prices ranging from $69 to $71.17, according to filings submitted on Wednesday. COO Frank Klein led the transactions, selling 45,692 shares for $3.18 million. Rocket Lab USA President Marvin Clevenger sold 15,051 shares for about $1.05 million, while CFO Adam Spice sold 9,677 shares for $674,000. Senior Vice President and General Counsel Arjun Kampani sold 7,754 shares for $540,000, and Chief Accounting Officer Agostino Ricupati sold 669 shares for about $47,000.

The filings called the transactions “sell-to-cover” sales made to satisfy tax-withholding obligations arising from the vesting and settlement of previously awarded restricted stock units, rather than discretionary profit-taking. Four filings said the transactions occurred under Rule 10b5-1 arrangements. Ricupati’s filing did not check the Rule 10b5-1 box but still explicitly said the sale was tax-related.

The executives retained 3.11 million shares after the transactions, or about 97.5% of their combined pre-sale holdings. RKLB stock fell 1% on Wednesday and is on track for a third consecutive weekly decline, with shares down 9% so far this week. The stock has risen 38% over the past year.

Shareholder Vote Approaches

The insider sales came as Iridium filed its definitive proxy statement and Rocket Lab prospectus, formally sending the proposed merger to Iridium shareholders. Under the deal, each Iridium share will convert into $27 in cash and a variable number of Rocket Lab shares based on Rocket Lab’s 10-day volume-weighted average price shortly before closing.

The exchange mechanics are structured around a three-tier price band:

Note: The transaction initially implied a $6 billion equity value and an $8.1 billion enterprise value for Iridium. Rocket Lab has secured a committed $3.6 billion bridge facility and may replace it with longer-term debt, equity financing or both.

Iridium shareholders will vote on the deal on Sept. 24. Former Iridium shareholders are estimated to own around 5% of the combined company.

Beck Teases Secret Defense Programs

During a new tour of Rocket Lab’s Long Beach facility as part of a fresh interview, Beck offered a rare glimpse into the company’s undisclosed defense work. When asked whether there were projects visitors were not allowed to see, he replied: “Lots.”

When pressed on whether the tour showed only a small portion of Rocket Lab’s operations, the CEO said, “I mean, we have a lot of national security programs. So, you know, these are sort of the missions that we can show you.”

Beck said much of Rocket Lab’s work involves demanding defense and interplanetary missions where reliability is essential. “Most of the stuff we do is like super hard, you know, defense-related or interplanetary and stuff like that where you just can’t have stuff fail,” he said. Some spacecraft shown during the tour were designed to operate for 12 years in “nasty, nasty radiation,” he added, calling them missions that “just cannot fail.”

On Stocktwits, retail sentiment for RKLB flipped to bearish from bullish levels a month ago amid a 27% decline in 24-hour message volumes. One user said, “$RKLB this is driving me nuts. It’s back down after great earnings and guidance. It’ll be profitable shortly. I have RKLB in an IRA and eventually it’ll be $200.”