EchoStar still fancies Inmarsat

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Despite a firm rebuttal, investment bank RBC Capital still sees EchoStar wanting to walk Inmarsat down the aisle, although the bank says another offer isn’t likely any time soon.

EchoStar made it bid announcement public on June 8th, and later saying that it had deliberately bought a 3 per cent stake plus 10.4  of Inmarsat’s bonds.

Inmarsat firmly rejected the offer saying that it had “significantly undervalued” the London-based satellite operator.

According to London stock market rules EchoStar must wait 6 months from the initial bid before returning to the negotiating table. EchoStar’s bid was at £5.32p a share.

RBC analyst Wilton Fry also doubts EchoStar’s ability to raise its bid price. “We believe the strategic rationale for Echostar buying Inmarsat (global presence, Ka-band complementary, L-band and S-band spectrum) remains very valid and Echostar is probably still interested,” said Fry in the bank’s research note. “However, Echostar is constrained not only by the six-month standstill (under rule 2.8) but also by its ability to issue equity given its weak multiple.”

Inmarsat’s shares fell back more than 5 per cent on September 4th to £5.18 a share.


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