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Inmarsat rockets after rejecting takeover approach from Echostar
Inmarsat confirmed after market close on Friday that it has received and rejected a "highly preliminary" and takeover proposal from US satellite giant Echostar Corporation.
FTSE 250-listed Inmarsat said its board had "carefully" considered the indicative proposal with its advisers and rejected it "on the basis that it very significantly undervalued Inmarsat and its standalone prospects", reiterating that it "remains highly confident in the independent strategy and prospects".
The company, a perennial candidate for takeover rumours and speculation, made the statement after recent press speculation and a 13.5% gain in its share price on Friday to 473.9p, where the company is valued at almost £2.2bn.
Echostar has, under UK takeover panel rules, until 1700 BST on 6 July to 'put up or shut up'.
Overnight UBS analysts had said reported M&A risk from Echostar and Softbank/OneWeb remains, "but is also likely to depend on visibility on how the supply side of the industry develops".
In a fresh note to clients, Morgan Stanley said it sees significant upside for Inmarsat on successfully monetising spectrum in the US. It added that an agreement with Ligado, which could see a pause in 2019 as regulatory approval is sought, for annual payments of $130m growing at 3% for 97 years, calculated to have an net present value of circa $1.25bn to Inmarsat, which is worth circa 200p per share.