Inmarsat rejects Echostar’s lowball offer
12 June 2018 | Natalie Bannerman
Inmarsat has confirmed that it has rejected an initial takeover offer from Charlie Ergen’s Echostar Corp.
The preliminary low ball offer was confirmed in a statement to the London Stock Exchange, promoted by the recent press speculation surrounding a possible deal. Following the market speculation Inmarsat’s share price jumped up to double digits gaining 13.5% on the London Stock Exchange Friday 8 June, to end the day at 474 pence per share.
In the statement, the satellite company confirmed that it rejected the Echostar offer “on the basis that it very significantly undervalued Inmarsat and its standalone prospects” but that “The Board remains highly confident in the independent strategy and prospects of Inmarsat.”
According to the rules of the London Stock Exchange, Echostar now has until July 6 to make a firm and detailed takeover offer, or announce that it is no longer interested.
“There can be no certainty either that any firm offer will be made or as to the terms on which any offer might be made,” continued Inmarsat in the statement.
Many analysts are speculating that Brexit and the fact that 94% of Inmarsat’s business comes from overseas might be at heart of why Echostar went in so low with their offer. With some predicting that Inmarsat will need a second bidder in the mix, before Echostar brings up its offer.
As the two continue to talk it out over the final sale price, Inmarsat continues to push ahead with its initiative as an independent entity. Most recently, the company entered into a memorandum of understanding with the Hellenic Space Agency (HSA) to collaborate on research and the development of future technology. Under the scope of the agreement the two parties will collaborate on research and development opportunities in space and ground segment technologies, as well as a mutual exchange of data.
But the company leaves us on a cliff-hanger with the tease of more saying: “A further announcement will be made in due course as appropriate.”