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Harbinger’s LightSquared Gets Break in $13.5B Deal with Sprint $S

HARBINGERPhil Falcone’s Harbinger Capital finally gets a break. The $1.52-billion hedge fund owns the lion’s share of LightSquared, a company that has the means to offer nationwide 4g – meaning no dead spots, again, ever.

The problem is that LightSquared has been beset with difficulties in getting approval from Washington for the technology. Senators Grassley (R-Iowa) and Roberts (R-Kan.) have spoken out openly against LightSquared’s proposed network, saying that the technology would interfere with the nation’s defense systems. Harbinger has spent millions in lobbying fees trying to gain the much-needed approval, but to-date has been unsuccessful.The thing is that there has been more at stake than just approval from the government. LightSquared has a contract in place with Sprint Nextel Corp. (S). It works like this – once LightSquared gets its approval, it will have a $13.5 billion, 15-year contract with S – but, last week, S said that it would give the troubled startup just 30 days more to get the necessary approval or it would walk. FINAlternatives, reports today that S had a change of heart. The company is putting that “$13.5 billion deal on hold until [LightSquared] wins the needed regulatory approvals.”

Could this be the work of new LightSquared CEO Marc Montagner, who formerly led mergers and acquisitions at Sprint Nextel Corp., including the acquisition of Nextel Communications? Maybe. But, in any case, Harbinger and its LightSquared has plenty to celebrate right now.

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