Inmarsat says “no” to Ergen

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Charlie Ergen, co-founder of the EchoStar and Dish Network businesses in the US, has offered to buy Inmarsat, the London-based global satellite company.

Inmarsat, in a statement after the market had closed on June 8th, said that it had received “a highly preliminary and indicative non-binding proposal from EchoStar Corporation in relation to the potential acquisition of the entire issued, and to be issued, share capital of Inmarsat”.

Inmarsat said the bid by Ergen significantly undervalued the company. Inmarsat’s share price had rocketed 13.5 per cent in trading on June 8th to £4.74. Last year it was suggested that Ergen could pay up to £15 a share for the business.

Advanced Television first speculated on the potential bid on December 1st last year.  Despite the rise in its share price on June 8th, the year-on-year value of Inmarsat has halved.  The operator’s market value is some £2.15 billion, although Inmarsat is also carrying more than £1.7 billion of debt.

Ergen, if nothing else, is a ‘spectrum hound’, and has spent considerable sums acquiring bandwidth both in the US and internationally. He now has until July 6th to improve his bid, or walk away for at least six months.


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