Inmarsat receives US$3.3bil private equity-led bid

LONDON: UK satellite company Inmarsat Plc is in takeover discussions after receiving a proposal for about US$3.3bil from a group of private equity and pension funds.

The non-binding offer from private equity firms Apax Partners and Warburg Pincus with support from the Canada Pension Plan Investment Board and Ontario Teachers’ Pension Plan Board is for US$7.21 a share for the entire issued share capital, Inmarsat said in a post-market statement on Tuesday.

The price represents a 24% premium on Tuesday’s closing price of 438 pence (US$5.81) per share.

UK Takeover Panel rules now kick in, meaning the bidding consortium will have a provisional deadline of April 16 to make a firm offer or walk away.

The proposal and its terms are still under discussion.

But it’s possible a firm offer won’t be made, according to the statement.

Representatives for Warburg Pincus and Apax declined to comment.

The offer follows an unsuccessful attempt last year by bilaire Charlie Ergen’s EchoStar Corp to acquire Inmarsat. French rival Eutelsat Communications SA also weighed a bid for London-based Inmarsat before backing off.

Apax was part of a consortium of investors that bought Innmarsat in 2003 and took it public two years later.

While Inmarsat’s connectivity sales to core maritime and government clients were flat in 2018, it posted strong growth in its aviation group thanks to booming demand for in-flight broadband, according to its annual report.

Its shares have fallen 45% over the last two years on declines in legacy products as well intensifying competition from traditional rivals such as ViaSat Inc and entrepreneurial challengers including Richard Branson-backed OneWeb and Elon Musk’s SpaceX.

The Betaville deal blog first reported on the potential deal Tuesday.