Monday 11 June 2018 12:15 pm

Inmarsat share price soars more than 12 per cent after confirming Echostar takeover approach

Shares in satellite giant Inmarsat have soared more than 12 per cent in early trading, after the company confirmed on Friday that it had received a takeover offer from Echostar.

Last week, the group said it had received "a highly preliminary and indicative non-binding proposal from Echostar Corporation", which it then rejected.

Inmarsat said the offer had "very significantly undervalued" the company and its standalone prospects, with the board saying they remained highly confident in the independent strategy being pursued by the company.

Shares in the satellite company jumped on Friday, and were up again this morning, rising more than 12 per cent.

Liberal Democrat leader Vince Cable yesterday warned the Inmarsat takeover approach needed to be watched, comparing it to Melrose's GKN takeover and the Softbank Arm acquisition.

https://twitter.com/vincecable/status/1005879240821235712

The share surge marked a welcome change for investors after a slump last month prompted by the breaking up of the company's global maritime distress signals monopoly. The United Nations' International Maritime Organisation’s (IMO) Maritime Safety Committee certified US-based Iridium Communications to provide Global Maritime Distress Safety System (GMDSS) services.

Last month, executive pay at the company was in focus, with shareholders hitting out at proposals that were "too closely geared towards short-term awards".

Some 58.49 per cent voted against Inmarsat's remuneration report at its annual general meeting (AGM).

Chief executive Rupert Pearce took over £1.9m in 2017 with finance chief Tony Bates paid £1.5m. The pair's remuneration fell from £2.3m and £1.8m respectively in 2016.

The revolt followed another in 2017 where 48.9 per cent of shareholders voted against the firm's annual report on remuneration.

Ashley Hamilton Claxton, head of responsible investment at one of Britain's biggest fund manager's, Royal London Asset Management, said Inmarsat's board "did not go far enough to address the dissent expressed by their shareholders in 2017, something which the results of today’s vote have demonstrated".