Following the recent first attempt by US company EchoStar to bid for the UK satellite business Inmarsat, another company has now revealed it is looking at possibly bidding. The new potential bidder is French company Eutelsat.
Inmarsat, which is very active in the marine market including the provision of a range of communication and other services to superyachts, rejected the EchoStar bid on the basis that it ‘significantly undervalued the business.’ Market analysts do not expect that EchoStar will leave it there and that at some point a second bid will be made.
As to Eutelsat, it has appointed Goldman Sachs as advisers ‘to evaluate a possible offer’ and under the rules it has until July 23 to make a formal bid. Eutelsat is similar in size to Inmarsat with a reported value of €3.8bn compared to Inmarsat’s £3.2bn. EchoStar has now built up a 3% holding in Inmarsat and it has until July 6 to make a formal offer.
What has made Inmarsat vulnerable to these bids was that its share price fell more than 50% between August 2017 and March 2018. With the show of interest by Eutelsat, the British company’s shares rose 4.3% to reach 632.2 pence. This rise followed an 11% jump late last week after Echostar made known its 3% holding in Inmarsat.
Eutelsat’s entry into the foray surprised the market somewhat as the French company has previously expressed launching its own satellites. The fall in Inmarsat’s share price and the interest show by EchoStar has highlighted an opportunity which Eutelsat may want to proceed on.
Market analysts consider that other players may enter the battle for Inmarsat. There has been concerns raised in the UK that that any takeover of Inmarsat could have national security aspects to take into account.