Yahoo Finance EchoStar walks away after Inmarsat rejects improved £3.2bn offer
US satellite communications company EchoStar has walked away from an attempt to buy FTSE 250 rival Inmarsat despite previously saying it would continue with its attempts.
Inmarsat said earlier on Friday that it had rejected a second offer worth £3.2bn from EchoStar, but the US suitor had said it would continue its attempts to engage with Inmarsat’s board.
EchoStar had until 5pm to make a formal offer under UK takeover rules, but said that it "does not intend to make an offer for the entire issued and to be issued share capital of Inmarsat".
EchoStar's improved offer on July 4 failed to tempt Inmarsat, which said that it “significantly undervalued” the company. Shares in Inmarsat plunged almost 10pc on the news before recovering slightly. After EchoStar's withdrawal, Inmarsat's shares fell 8.02pc to 483.8p.
EchoStar had said its cash and shares offer was equivalent to 532p per share. It said this was a 46pc premium to Inmarsat’s share price the day before it first approached the company in May.
Inmarsat’s shares had been heading downwards from a peak of almost £11.37 four years ago to a low of 334p in April.
On rejecting EchoStar's second approach, Inmarsat said its board “remains highly confident in the independent strategy and prospects” of the company.
In a sector ripe for consolidation, Inmarsat is an attractive target and has received a lot of attention. On June 8 the company revealed it had received what it called a “highly preliminary and indicative non-binding proposal” from EchoStar and later that month French rival Eutelsat pulled out of a potential approach to the company just hours after saying it was mulling a deal.
But any approach for Inmarsat could face hurdles, since the UK company is considered to be a crucial infrastructure asset and also one of the country’s few remaining technology giants, which could see it protected under the Government’s industrial strategy.
