6th Jul 2018 08:52
LONDON (Alliance News) - Inmarsat PLC on Friday confirmed it has rejected a second takeover proposal from EchoStar Corp which it believed "significantly" undervalued the firm.
Inmarsat also said the offer failed to recognise its standalone prospects, and the firm is "highly confident" in its strategy and future.
Shares were down 9.6% on Friday in early trade at 475.60p, the worst performer in the FTSE 250 index.
US peer EchoStar made a first proposal in early June, which Inmarsat rejected. The new proposal, rejected on Wednesday, would have seen Inmarsat shareholders get 265 pence in cash and 0.777 new EchoStar shares per Inmarsat share.
This would have amounted to a total value of 532p per share. Inmarsat shares closed at 526p on Thursday, giving it an approximate market capitalisation of GBP2.43 billion.
However, EchoStar would also offer USD296,225 in both cash and shares to holders of Inmarsat's 3.875% convertible bonds due in 2023 for each bond.
This means the total offer for Inmarsat and the bonds would be GBP3.2 billion, a 46% premium to Inmarsat's 363p closing price in late May, the day before the first proposal.
EchoStar said: "EchoStar believes a combination of EchoStar and Inmarsat is strategically compelling. The combined group would be one of the world's leading satellite providers and be well supported by a global portfolio of complementary assets and service offerings.
"EchoStar believes the improved proposal presents a compelling opportunity for Inmarsat's shareholders to realize certain value from their investment in Inmarsat while also participating meaningfully in the upside potential of the combined company."
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