Backlash at foreign swoop on £2.5billion satellite pioneer

As takeover talks send Inmarsat shares soaring...

SHAReS in Inmarsat rocketed higher after a group of suitors from the UK and overseas launched a £2.5bn bid for the satellite technology giant.

The FTSe 250 company revealed it is in talks with a consortium of investors, including US-based Warburg Pincus, London-based Apax and two Canadian pension funds.

But the deal faces opposition amid concerns about a major British satellite operator falling into the control of foreign owners.

And the takeover bid is expected to face scrutiny from ministers, after the Government last night confirmed it was monitoring the talks.

Satellites are classed as important national infrastructure and Inmarsat counts the UK and US militaries among its customers.

Critics of the deal warned the sale would be yet another example of Britain allowing one of its most successful technology companies to be snapped up by foreign rivals.

Sir Vince Cable, leader of the Liberal Democrats and a former business secretary, called on ministers to take a close interest in the takeover.

He said: ‘I am seriously concerned that one of the UK’s last major technology companies, and a major part of our successful space industry, could disappear. The secretary of state should use his powers to intervene.’

Howard Wheeldon, a defence and aviation analyst, said: ‘With the Government having set out its space policy and the Royal Air Force now actively engaging in space strategy, it is absolutely crucial that we maintain and enhance our sovereign satellite capabilities. Inmarsat is a very important player and we need to ensure it gets the correct level of protection.

‘As with all takeovers in defence and aerospace, we need to be very, very careful. If there is sufficient reason to do so, we should be willing to block the deal.’

Last night a Government spokesman said: ‘This is a commercial matter, but we are monitoring the potential takeover.’

Shares in Inmarsat closed 13.1pc higher, or 57.5p, at 495.3p after the company revealed talks were under way. It is thought other bidders could enter the fray.

Inmarsat dates back to 1979 when it was part of the Un-controlled International Maritime Organisation. It was privatised in the 1990s after member countries refused to pay for upgrades to its network. The company operates 13 satellites and more than a third of its business comes from the maritime sector, with the firm providing tracking and communication services to ships.

The latest offer for the company comes just eight months after it fought off bids by France’s eutelsat and American rival echo Star, which offered 532p per share. echo Star’s bid was just 2.3pc less than what the consortium is offering in the current talks. Rupert Pearce, Inmarsat’s chief executive, previously dismissed suggestions of a sale after claiming echo Star’s bid ‘significantly undervalued’ the business. At that time, he said: ‘We don’t feel weak about our future and we don’t feel the need to engage in a merger even with somebody in our industry at this point in time. We don’t think that will drive exceptional value for shareholders. So, that’s why we did not engage.’

However Inmarsat has now revealed it has been in talks with Apax, Warburg and others since January, with the talks dubbed ‘Project Triton’ by staff at the satellite firm. Some analysts speculated its announcement about the consortium’s interest was an attempt to coax a higher offer out of its suitors.

‘The decision to unilaterally disclose the consortium’s six-weekold bid, almost identical in value to the rejected echo Star bid, feels like a well-advised “stalking horse” that could now result in a revised bid from either suitor,’ analysts at Jefferies wrote.

The consortium, made up of Apax, Warburg, the Canada Pension Plan Investment Board and Ontario Teachers’ Pension Plan Board, is thought to be interested in Inmarsat’s growing business supplying internet connections to planes. Its customers include British Airways, emirates and norwegian, but the division is expected to need significant investment.