Most of the shareholders of London-based Inmarsat, precisely 79% of them, voted on 10th May in favor of takeover bid offered by a consortium of buyers including Canadian pension firms OTPP and CPPIB and private equity firms Warburg Pincus and Apax. The acquisition deal is expected to close in 2019 Q4. It brings about a change of pace from a year earlier when Rupert Pearce, the CEO of Inmarsat, had stated that the company was not for sale. The British company had previously rejected acquisition offers a couple of times from EchoStar, an American satellite operator. Reason cited for rejection of the bids was that even a $4.25bn offer apparently undervalued the company. Eutelsat, a French satellite operator, wrestled with the idea of bidding on Inmarsat last June but eventually dropped the idea.
Analysts believe that the reasons behind the consortium deal attracting more attention and traction are its all-cash nature and the $0.15 higher price of each share. Both Siddharth Shihora of PwC and Damien Garot of Jansky cited similar reasons for the same. The latter further stated that the offer made by EchoStar was greater than half the firm’s own illiquid and seldom volatile stock and that the involvement of Apax, a British company, is also expected to do good to the consortium.
The four companies acquiring Inmarsat have formed Bidco Limited, a brand new company, with 25% of shares given to each member. Formerly known as Triton Bidco, the company believes in the uniqueness and possibilities of the satellite sector and how it has potential for serving rising demands for broadband connectivity. Integrated satellite operators having scale like Inmarsat will be in good position to benefit network provision as it becomes more and more complicated and complex with time. Bidco stated that headquarters of Inmarsat would be located in the UK.