Eutelsat, the world’s third-largest satellite operator, has thwarted rumours – ignited by the company itself -that it is interested in bidding for Inmarsat.
In a statement made on June 26th, the company said: “Pursuant to market rumours, during the trading session on 25 June, Eutelsat Communications issued, at the request of the UK Panel on Takeovers and Mergers, a press release confirming that it was considering a possible offer for Inmarsat, without any certainty that an offer would be made. This statement was made in strict compliance with Rule 2.2 of the Code.
Eutelsat hereby states that it does not intend to make an offer for Inmarsat and is consequently, except with the consent of the Panel, bound by the restrictions set out under Rule 2.8 of the Code applicable during six months from the date of this announcement.”
The news of a potential bid did not go down well with Eutelsat’s investors. They have patiently waited for a recovery in the company’s revenues and profits and seemingly do not relish the new borrowings needed if Eutelsat were to successfully bid for Inmarsat. Eutelsat’s share price plummeted 7.5 per cent on the news, and closed the day down 6.2 percent.
Eutelsat CEO Rodolphe Belmer has made no secret that he wants to tap into new opportunities in services like Internet of Things connectivity, and has already commissioned a test satellite to evaluate this aspect of future market demand. But Inmarsat has plenty of capacity and coverage in precisely these businesses. Inmarsat also has growth potential from aeronautical (and maritime) expansion.