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Chris Hughes

Just 13 Pence Brings This Satellite Down to Earth

Inmarsat’s takeover isn’t about Brexit or the heavy cost of putting satellites in space. It’s about how long shareholders will wait.

Ground control.

Ground control.

Photographer: Chris Ratcliffe/Bloomberg

All it took was an additional 13 pence a share. Inmarsat Plc has opened its doors to a group of private equity firms dangling a $3.3 billion bid. That’s just 2 percent more than the price billionaire Charlie Ergen offered last year, and which the British satellite group peremptorily dismissed.

The board’s U-turn is just about defensible. Nine months on from the approach by Ergen’s EchoStar Corp., and the stock market still doesn’t care for Inmarsat. Before takeover speculation lifted the stock this month, the shares were little changed over the past year. The mooted offer from the Apax and Warburg Pincus-led group is in cash, while the billionaire’s was partly denominated in shares. The case for rejecting an offer pitched at a 34 percent premium to the shares’ average price over the past three months is thus harder to make. The proposal values the whole company at nearly $6 billion, including net debt, roughly nine times this year’s expected Ebitda.