LONDON (Reuters) – U.S. satellite group EchoStar (SATS.O) said on Friday it was seeking engagement with the board of Inmarsat (ISA.L) after the British firm rejected its latest takeover offer worth $3.2 billion to equity holders.
Shares in Inmarsat fell 10 percent in early trading to 475 pence after EchoStar revealed its cash and shares offer of 532 pence per share had been rebuffed.
Analysts at Jefferies said they were not surprised the offer had been rejected but thought the U.S. company could eventually pursue a hostile bid.
“EchoStar believes that 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,” it said.
Inmarsat rejected a previous approach from EchoStar in June, saying the offer significantly undervalued the company. Just over two weeks later France’s Eutelsat Communications (ETL.PA) said it had dropped its interest in the company after contemplating a rival approach.
The sudden interest had driven Inmarsat’s shares up 26 percent since the initial bid emerged and before Friday’s update.
Founded in 1979, London-based Inmarsat was set up by the International Maritime Organization as a way for ships to stay in communication with shore and make emergency calls.
Since then, the group has become a private company, providing communications for aircraft, ships, broadcasters, aid agencies and governments through its fleet of 13 satellites.
Colorado-based Echostar supports similar organizations including the U.S. government with its 23 satellites.
Echostar had been set a deadline of 1700 local time on Friday to “put up or shut up”. It said it would be willing to proceed with the proposal if it received an extension of the deadline and the recommendation of the Inmarsat board.