EchoStar scrubs Inmarsat bid, for now

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Inmarsat firmly rejected EchoStar’s £3.2 billion bid for the London-based satellite operator, despite EchoStar offering £5.32 per share, up 27 per cent on its earlier June 8th offer and 40 per cent up on Inmarsat’s average share price for the 3 months to June 7th.  Inmarsat claimed the bid significantly undervalued the company.

EchoStar, at 4pm London-time on July 6th, said – in effect – it will keep its powder dry, and not make a formal bid. Under London stock exchange rules, EchoStar says that it will honour the takeover code and would not return to the table unless invited to do so by Inmarsat, or some other business made a bid for Inmarsat.

EchoStar stressed that it still saw a merger with Inmarsat as “strategically compelling” adding: “EchoStar believes that the improved proposal presents a compelling opportunity for Inmarsat’s shareholders to realise certain value from their investment in Inmarsat while also participating meaningfully in the upside potential of the combined company,” read a stock market announcement.

Smaller investors almost immediately bailed out, and sent Inmarsat’s share price down 10 per cent t6o £4.75.

In a research note, Jefferies Equity Analyst MD Giles Thorne said he wasn’t surprised that the revised offer was rejected. “[Due to] EchoStar’s evident unwillingness to bid-up in uncontested M&A, we could see EchoStar turn hostile in time,” Thorne stated.


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