Inmarsat rebuffs US suitor Echostar for second time after £2.5 billion approach

High tech: Inmarsat's headquarters are perched on the edge of Old Street's Silicon Roundabout

Michael Bow6 July 2018

British satellite company Inmarsat on Friday snubbed a second takeover bid from US suitor Echostar, throwing the future direction of the high-tech star into doubt.

The FTSE-250 group tried to end weeks of cat and mouse by rebuffing Echostar’s fresh 532p-a-share offer, made up 50/50 in cash and shares, saying it “very significantly undervalues” the group. The bid valued the company at £2.45 billion excluding debt.

The US satellite firm, controlled by billionaire tech magnate Charlie Ergen, was likely to see its attempt to ink a deal fizzle out unless it could pull off an 11th-hour agreement today.

Echostar will now probably have to walk away for six months.

Echostar said it was hoping for “engagement” with the Inmarsat board on a “constructive basis”.

However, Inmarsat said it was “highly confident” of its future as a standalone company. Its shares fell 10% to 486p, although they are much higher than the 363p price before Echostar first approached last month.

Satellite infrastructure is considered a “strategic” sector by the Government — Inmarsat supplies the British military — adding a political dimension to the deal. Liberal Democrat leader Vince Cable opposes the bid.

French satellite firm Eutelsat entered the fray last month but pulled out within 24 hours.