CPPIB in US$3.3B bid for Inmarsat

LONDON • Inmarsat PLC received a takeover offer worth about US$3.3 billion from a group of private equity and pension funds, the second approach in less than a year for the U.K. satellite company.

Apax Partners and Warburg Pincus, supported by the Canada Pension Plan Investment Board and Ontario Teachers’ Pension Plan Board, made the non-binding cash bid of US$7.21 a share on Jan. 31, Inmarsat said Tuesday after the market close in London.

That’s slightly higher than an unsuccessful cash and equity bid last July from billionaire Charlie Ergen’s Echostar Corp. that valued Inmarsat at 532 pence a share, or about US$7.07 at the time. French rival Eutelsat Communications SA also weighed an offer before backing off.

Inmarsat faces growing competition from traditional rivals such as Viasat Inc. and newer challengers including Richard Branson-backed Oneweb and Elon Musk’s Spacex.

“We believe it is a good offer, and that Inmarsat isn’t worth much more,” James Congdon at Canaccord Genuity said in a note. He cited a decline in Inmarsat’s profit margins and return on capital over the past eight years.

Inmarsat shares rose 16.7 per cent as of 1:45 p.m. in London on Wednesday, giving the company a market value of 2.37 billion pounds (US$3.12 billion).

The latest bid is 24-percent above Inmarsat’s closing price Tuesday. The proposal and its terms are still under discussion and it’s possible a firm offer won’t be made, Inmarsat said.