Shares in British satellite firm Inmarsat soared more than 16 per cent in early trading after it revealed it is in talks with two private equity firms over a buyout deal.
Inmarsat last night confirmed it is in discussions with Apax Partners and Warburg Pincus, which have tabled a cash offer of $7.21 (£5.43) per share, valuing the company at roughly $3.3bn.
Canada Pension Plan Investment Board and Ontario Teachers’ Pension Plan Board have also joined the consortium of potential buyers, Inmarsat said.
The potential takeover comes after US rival Echostar ditched its plan to buy Inmarsat after its £3.2bn offer was rejected by the satellite firm. French firm Eutelsat also scrapped plans for a potential takeover last year.
In a note published today Canaccord Genuity subsidiary Quest said: “We would suggest that management doesn’t haggle too much with the consortium, as we believe it is a good offer and that Inmarsat isn’t worth much more in terms of a deal.”
But Helal Miah, investment research analyst at The Share Centre, said Inmarsat may stick to its guns following “encouraging” full-year results.
“We believe Inmarsat may once again argue to remain independent and not recommend this offer to shareholders, which we believe explains why the shares this morning were not trading closer to the takeover price,” he said.
The buyers must announce its intention to make a formal offer by 16 April or abandon the proposal.
Clifford Chance is advising Inmarsat on the deal, while communications firm Teneo is working with Warburg Pincus.
Earlier this month the London-headquartered company reported that it had increased revenue by 5.3 per cent to $1.46bn last year, driven by demand for in-flight broadband.