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Avanti Communications saw a dramatic jump in its share price on August 4th. At the start of the day the well-depressed shares were priced at 22p, but as the day progressed at one point they had almost doubled in value (to 39p) helped by a news report on the FT’s Alphaville news blog. At the end of the day the shares were up 44 per cent.
The contributor, Paul Murphy, had reported that a week ago Patrick McDougal, Inmarsat’s head of business and strategy, had been in contact with Dominic Lester, joint-head of investment banking at Avanti’s market advisor Jefferies.
Murphy says he wanted to table a second offer for Avanti (having had a previous offer rejected by Avanti). Inmarsat, reports Murphy, was now ready to pay 140p a share, in cash, for Avanti, subject to the usual due diligence investigations.
On August 1st, Inmarsat had stated formally that, while it had been in touch with Avanti’s advisors, it was not now considering an offer for Avanti.
Stock exchange rules now forbid Inmarsat making another offer for the time being.
However, the FT’s report by Murphy, clearly well briefed, states that Avanti is thought to be in “detailed” discussions with two other potential acquirers.