Sats-WFS deal: Lack of clarity on funding plan diverts investor focus from merits of acquisition

THE board of Sats could not have been unaware that its proposed acquisition of Worldwide Flight Services (WFS) would be met with hostility in the market.

On Sep 21, the inflight caterer and ground handler confirmed a news report that it was indeed discussing a potential acquisition of WFS. The following day – despite some analysts extolling the strategic benefits of such a deal – its shares fell more than 5 per cent.

As it happened, Sep 21 was also the day the United States Federal Open Market Committee hiked interest rates by 75 basis points for a third consecutive time and slashed its estimates of US growth for 2022 and 2023 – which sparked a big sell-off around the globe.