Rocket Lab raised its offer for Iridium Communications by nearly 30% during negotiations, a significant jump that has drawn scrutiny from satellite communications consultant Tim Farrar.
Farrar identified AST SpaceMobile as the most plausible company behind “Party B,” a mystery suitor that entered due diligence but withdrew without submitting a formal offer.
The merger filing does not identify any of the mystery bidders by name, leaving Farrar’s conclusion unconfirmed but nonetheless drawing significant attention from investors.
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, opening what became a months-long escalating negotiation.
Rocket Lab raised its proposal to $52 on June 3, structured as $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.
Only one mystery suitor, Party A, submitted a firm rival offer of $41 to $45 per share entirely in cash, but declined to bid higher citing what it viewed as elevated market speculation driving Iridium’s stock price.
Farrar believes Party A was a private-equity firm, while Iridium adviser Evercore also contacted 10 potential strategic buyers, of whom only Party B entered due diligence before withdrawing two weeks later.
Party B would have required a “strategic partner” to pursue Iridium, according to the merger filing, which is a key reason Farrar pointed toward AST SpaceMobile as the likely candidate.
“The most plausible ‘strategic counterparty’ in this category is AST SpaceMobile,” Farrar said, arguing that AST would have needed support from one or more telecom companies to mount a credible bid.
Farrar also believes Party C, which contacted Iridium but declined to bid, was likely Viasat (VSAT), though that identification also remains unconfirmed.
According to Farrar, Iridium used Party A’s cash offer to pressure Rocket Lab for greater “value certainty” without revealing exactly how low the rival bid actually was.
Rocket Lab ultimately increased the cash portion of its proposal from $15 to $27 per share while lifting the total offer to $54, implying roughly $6 billion in equity value and an $8.1 billion enterprise value.
Farrar said the process suggests AST may struggle to fund a major spectrum acquisition without a telecom partner, potentially weakening speculation about a bidding war with Amazon and SpaceX for Viasat’s L-band spectrum.
He previously noted that Rocket Lab and AST are both “trying to emulate SpaceX” through vertical integration, but suggested Rocket Lab holds a stronger competitive position.
“Rocket Lab, I think, has a slightly better position,” Farrar said, noting that AST challenges Starlink directly in satellite-to-phone connectivity, an arena where SpaceX has grown increasingly dominant.
“SpaceX is so dominant in this business now,” Farrar said. “It’s competing really heavily, particularly against AST.”
Iridium filed its definitive proxy and Rocket Lab prospectus on Wednesday, setting a Sept. 24 shareholder vote, with Iridium investors set to receive $27 in cash plus a variable number of Rocket Lab shares.
Rocket Lab has secured a $3.6 billion bridge facility, and the companies expect the transaction to close in mid-2027, subject to regulatory approval, as RKLB stock has risen 38% over the past year.
