UK ‘may block’ Inmarsat takeover on security grounds
The UK government may block the $6 billion takeover of London-based Inmarsat on grounds of national security.
Jeremy Wright, the Cabinet minister in charge of digital and media affairs, has asked the UK’s financial regulator, the Competition and Markets Authority (CMA), to report back by 17 September.
Wright said that he had considered the representations received from other Cabinet colleagues, including defence, business and foreign affairs in making his decision.
The future of Inmarsat has been in question since last year, when it turned down a £3.2 billion bid from US company EchoStar. In March it confirmed that it was in discussions over a takeover bid from a consortium of Apax Partners, Warburg Pincus, the Canada Pension Plan Investment Board and the Ontario Teachers’ Pension Plan.
A rival group – Centerbridge, Cerberus and SoftBank’s Fortress Investment – considered making a £3 billion bid, equivalent to $3.74 billion, but had second thoughts. Eutelsat also briefly considered a bid last year, but also had second thoughts.
The UK government hasn’t specified why it has doubts. The Apax-led bid – though all four groups have equal stakes – is being carried out through a special purpose company registered on the Channel island of Guernsey, but no details of any concerns have leaked. The bidders have given guarantees that they would keep Inmarsat’s control centre in the UK: at the moment it is on the Old Street roundabout in central London.