Inmarsat Says Natural for Private Equity to Mull Investment

Inmarsat Plc Chief Executive Officer Andrew Sukawaty said it is “natural” for private-equity firms to consider an investment in the biggest provider of satellite services to the maritime industry.

“There has been no formal approach,” Sukawaty said in an interview in Paris today. “Given our good long-term growth prospects and given our current stock value, it’s a natural thing for private equity to consider an investment in Inmarsat.”

Inmarsat, the most volatile of telecommunications stocks in the Stoxx 600 index in the last month, advanced as much as 2.9 percent in London trading following Sukawaty’s comments. The shares have declined 26 percent since Philip Falcone’s Harbinger Capital Partners said in October it would sell its holding.

Falcone, who had considered a full takeover of Inmarsat in 2008, then opted to sign a spectrum agreement with Inmarsat to roll out high-speed mobile Internet services in the U.S. The London-based company’s spectrum accord with Falcone’s Lightsquared Inc. helped first-half profit to climb 28 percent.

The annual payment stream from Lightsquared alongside Inmarsat’s investment in new satellites to expand naval communication services mean investors’ interest should “come as little surprise,” said Royal Bank of Scotland Group Plc analyst Chris Alliott.

High Profit Margins

Satellite companies are attracting investors by providing some of the highest profit margins in the technology industry, making them safe investment targets as the sovereign debt storm batters Europe and global markets.

Inmarsat’s 2010 profit margin rose to 59 percent from 57 percent a year earlier. That compares with 32 percent for Vodafone Group Plc, the world’s biggest mobile-phone operator, and 30 percent for Apple Inc., the world’s largest technology company, according to Bloomberg data.

Dish Network Corp., the second-largest U.S. satellite-television provider, this year agreed to buy DBSD North America Inc. for about $1 billion. EchoStar Corp., a provider of television set-top boxes and satellite services, agreed to buy Hughes Communications Inc. for $2 billion including debt in February.

Inmarsat in August raised its interim dividend by 10 percent to 15.4 cents and said it plans to repurchase stock for as much as $250 million because of its “strong” financial position. Rupert Pearce is set to replace Sukawaty, who will become executive chairman, on Jan. 1.

Inmarsat gained as much as 13.9 pence in London and was up 6 pence, or 1.3 percent, at 482.6 pence at 1:43 p.m.

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