Inmarsat: The dust settles

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Inmarsat is to shift ownership, from its publicly-quoted listing on the London Stock Exchange to a new consortium led by private equity fund Apax Partners and Warburg Pincus along with a bit of help from two Canadian Pension Funds. The bid is all cash.

As initially reported, the buying consortium is offering a 27 per cent premium (compared to Inmarsat’s closing price of £4.31 a share on March 18th). Inmarsat will maintain its London headquarters.

A bid by EchoStar last July offered up just $3.2 billion (or £5.46 a share), and was promptly rejected by Inmarsat. At the time, there were plenty of analysts suggesting that EchoStar’s chairman Charlie Ergen might go much higher with a future bid.  The rejection meant there was a 6-month ‘close out’ as far as any future bid from EchoStar was concerned. In other words, Ergen is now technically free to mount a rival bid although most analysts expect him to stay out of this game.

Apax (with Permira) has a detailed knowledge of Inmarsat. It owned the business in 2003 and led the IPO in 2005. Inmarsat’s largest shareholder is Landsdown Partners (with a 11.4 per cent stake) and is backing the move.

Unless a counter-offer emerges the new owners are likely to take control by the end of the year subject to the usual regulatory examinations.

The new shape of Inmarsat – and its financial appeal – is undoubtedly focused on the company’s growing importance in the In Flight Connectivity and entertainment business, and the supply of Internet and live sport, news and movies direct-to-seat within an aircraft.


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