Telecom Tycoon Drahi Said to Offer $3.2 Billion for Eutelsat
(Bloomberg) -- Billionaire Patrick Drahi has made a bid for Eutelsat Communications SA valuing the French satellite operator at about 2.8 billion euros ($3.2 billion), a person with knowledge of the matter said.
Drahi offered around 12.10 euros per share for Eutelsat earlier this month, said the person, who asked not to be identified because the information is private. Eutelsat, which operates satellites for clients such as government agencies and TV broadcasters, confirmed it has received a bid in a statement Wednesday but has decided not to engage in discussions based on the terms of the proposal.
The French telecom mogul has been working on a potential deal for several months as he seeks to create a French national champion in satellite communications to take on U.S. rivals, the person said. The bid represents about a 17% premium to Eutelsat’s Wednesday closing price of 10.35 euros.
Reuters first reported news of Drahi’s approach earlier Wednesday, without citing the level of the offer. Negotiations are ongoing, and there’s no certainty they will result in a deal, the person said. A spokesperson for Drahi’s holding company declined to comment, while representatives for Eutelsat didn’t immediately answer phone calls seeking comment.
Given their strategic and military importance, Eutelsat and most of its rivals are overseen by government stakeholders. Politicians would likely have to sign off on this potential takeover and any future deals.
Drahi, 58, recently bought out minority shareholders of Altice Europe NV, the owner of French phone carrier SFR, to take the company private. He also owns the auction house Sotheby’s, which he bought in 2019. He would acquire Eutelsat via his holding company Next Alt Sarl, which also owns those companies. The Bloomberg Billionaires Index puts his wealth at $10 billion.
The satellite sector is seen as ripe for dealmaking as traditional revenue from television broadcasts stagnates and well-funded projects from billionaires like Elon Musk are redrawing the industry’s economics, launching thousands of spacecraft to beam broadband from low-Earth orbit.
Eutelsat is one of several satellite communications companies vying to establish a network of low-Earth-orbit satellites for faster wireless communications, including Musk’s Starlink and one by Amazom.com Inc. founder Jeff Bezos.
Eutelsat agreed in January to acquire a 24% stake in OneWeb, a competitor in the low-Earth orbit rush, for $550 million, joining investors that include the British government, India’s Bharti Global and SoftBank Corp. It’s scheduled to launch its next batch of 36 satellites on Oct. 14.
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