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By Dinesh Nair, Manuel Baigorri and Scott Moritz (Bloomberg) — EchoStar Corp. is considering raising its offer for rival Inmarsat Plc after its initial approach for the British satellite company was rejected as being too low, according to people familiar with the matter.
EchoStar, founded by billionaire Charlie Ergen, is discussing financing for an improved offer in the coming days, said the people, who asked not to be identified because the plans are private. EchoStar is working with financial advisers on its bid, the people said. A final decision hasn’t been made, and the U.S. company may decide not to proceed with an offer, they said.
Inmarsat’s U.S.-listed shares rose as much as 9.3 percent and traded up 4.7 percent at $7.47 at 1:06 p.m. in New York. The London-based company has a market value of about $3.2 billion, while EchoStar — which is down 23 percent so far this year — is worth about $4.4 billion.
Representatives for EchoStar and Inmarsat declined to comment.
Inmarsat said June 8 it had turned down a “highly preliminary” offer from EchoStar after consulting its advisers. Inmarsat’s stock rose 28 percent over two trading days, but has still lost more than half is value since a peak at the end of 2015. That’s elevated the company to the top of analysts’ lists of potential targets for consolidation in the industry, where oversupply is pushing down margins as demand lags behind, spurring existing companies to consider their alternatives.
EchoStar has long been seen as a potential bidder for Inmarsat, along with SoftBank Group Corp.’s OneWeb. Inmarsat sees aviation services such as in-flight Wi-Fi as its biggest growth driver in the coming years and is also seeking to diversify into businesses like connected cars, after coping with a protracted slowdown in shipping.
© 2018 Bloomberg L.P
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