LONDON (Reuters) - British satellite firm Inmarsat ISA.L on Friday rejected a takeover approach from U.S. firm EchoStar (SATS.O), saying it significantly undervalued the company.
Inmarsat issued the statement after bid speculation spurred its shares to a three month high. The stock closed up 13.5 percent, giving it a market capitalization of 2.2 billion pounds ($2.95 billion).
“After carefully considering the proposal with its advisers the board rejected the proposal on the basis that it very significantly undervalued Inmarsat and its standalone prospects,” it said in a statement issued after the market closed.
“The board remains highly confident in the independent strategy and prospects of Inmarsat.”
The group, which provides communications for shipping, aircraft and for governments, said the approach was highly preliminary and non-binding, and there could be no certainty that a firm offer would be made.
The approach by Colorado-based EchoStar was for the entire share capital of Inmarsat.
Satellite stocks across Europe had been gaining throughout the day after SES (SESFd.PA) won authorization from the U.S. Federal Communications Commission to expand its O3b satellite fleet and got an upgrade to “buy” from UBS analysts.
SES shares gained 4.4 percent and Eutelsat (ETL.PA), which UBS also upgraded to “buy”, rose 3.6 percent.
Reporting by Alistair Smout, Helen Reid and Siju Varghese, additional reporting by Paul Sandle, Editing by Alasdair Pal and James Davey