Eutelsat Confirms It's Evaluating a Possible Offer for Inmarsat
(Bloomberg) -- France’s Eutelsat Communications SA said it’s weighing a takeover offer for for Inmarsat Plc, a move that could spark a bidding war with EchoStar Corp. for the $3.7 billion British satellite operator.
There’s no certainty an offer will be made, or what the terms might be, Paris-based Eutelsat said in a statement Monday, confirming a report earlier in the day by Bloomberg News. Under U.K. takeover rules, Eutelsat will have to announce by July 23 whether it intends to make an offer or that it’s decided not to, the company said.
Eutelsat is speaking with its advisers about financing a potential bid, Bloomberg reported, citing people familiar with the matter who asked not to be identified as the matter is confidential. Inmarsat declined to comment. Shares of the U.K. company surged as much as 6.6 percent, heading for their highest close in more than seven months.
Eutelsat, which competes with Inmarsat in in-flight data services, is trying to bolster growth as the satellite network industry consolidates to pare costs following a period of heavy investment. The French company, which counts the French government as its biggest shareholder, may offer more operational synergies for Inmarsat than a merger with EchoStar, analysts have said. Still, EchoStar is seen as a stronger suitor from the perspective of financial firepower, the people said.
Shares of Inmarsat rose 4 percent to 630.20 pence at 3:30 p.m. in London, giving the company a market value of about 2.9 billion pounds ($3.9 billion). The stock has soared since the company disclosed June 8 that it had received, and rejected, a preliminary offer from EchoStar.
Eutelsat’s stock dropped 8.4 percent to 16.14 euros in Paris, giving the company a market value of 3.7 billion euros ($4.4 billion).
EchoStar last week said it had a stake of almost 3 percent in Inmarsat, two weeks after its bid for an undisclosed amount was rebuffed. The holding was built prior to Inmarsat’s June 8 announcement, people familiar with the matter said at that time. Founded by billionaire Charlie Ergen, the Englewood, Colorado-based suitor is discussing financing for an improved offer in the coming days and working with advisers on its bid, people familiar with the matter said last week.
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