At closing, Zeus will be acquiring Intelsat, and Intelsat's current shareholders generally will be entitled to receive $18.75 for each Intelsat share issued and outstanding immediately prior to closing, subject to adjustment in a specified circumstance.

The total value of the transaction, including approximately $2 billion of existing net debt, is approximately $5 billion. The transaction was approved unanimously by the Intelsat, Ltd. Board of Directors.

"This transaction comes at a time when Intelsat is successfully executing on its strategies for market leadership in the fixed satellite services sector. We believe that the acquisition of Intelsat by this consortium of well-respected private equity investors represents the best opportunity for Intelsat to achieve its strategic goals," said Intelsat Chief Executive Officer Conny Kullman.

"Once completed, this transaction will both satisfy our shareholders' interest in a strong valuation and allow shareholders to monetize their investments. At the same time, the deal will align Intelsat's future with a force that can make our vision for continued leadership a reality."

"Our consortium is very pleased to begin a partnership with Intelsat, a global leader in the fixed satellite services sector. Intelsat's healthy, young and flexible satellite fleet, seasoned management team, strong brand and solid backlog of long-term contracts create a very attractive investment opportunity," said the representatives of the consortium."

"As Intelsat enters its next stage of strategic development, its operational strength, stable, diversified revenue base and global market presence offer the company a variety of exciting organic and strategic growth opportunities, and the consortium will provide the financial and strategic support Intelsat needs to capitalize on these opportunities."

At closing, all of the existing service commitments between Intelsat and its customers, including those dating from the privatization in 2001, will remain in force.

"Intelsat and members of the consortium understand that strong and stable media, communications, corporate and government customers are the lifeblood of Intelsat's business. Although the satellite industry continues to evolve, our commitment to our customers, including continuing to deliver the 'gold standard' in satellite services, remains unchanged," said Intelsat CEO Kullman.

Required approval of shareholders holding 60% of Intelsat's outstanding shares will be sought in a general meeting of shareholders expected to be held later this year.

The closing of the transaction is subject to the satisfaction or waiver of several conditions, including the receipt of shareholder and regulatory approvals. Intelsat currently expects that required approvals could be obtained and closing could occur as early as the end of 2004.

Zeus has obtained commitments for financing the acquisition, subject to the satisfaction of customary conditions. Intelsat understands that Zeus intends to finance the transaction in part with debt that, after giving effect to the transaction and consistent with the terms of Intelsat's existing indebtedness, will be at the Intelsat (Bermuda) level.

The security expected to be granted in connection with this new debt will be in compliance with the terms of Intelsat's existing indebtedness and is not expected to result in the grant of security to the company's existing senior notes.

Merrill Lynch and Morgan Stanley are acting as financial advisors to Intelsat. in connection with the transaction. Credit Suisse First Boston, Goldman, Sachs & Co. and Lehman Brothers Inc. are acting as financial advisors to the consortium in connection with the transaction.

The new debt financing will be led by Deutsche Bank Securities, Credit Suisse First Boston and Lehman Brothers.

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