Private equity-led consortium to buy Inmarsat for $3.4 billion cash

March 25, 2019

(Reuters) – A private equity-led consortium on Monday agreed to buy British satellite operator Inmarsat for about $3.4 billion in cash, six months after Inmarsat rebuffed a slightly lower cash and stock bid from U.S. satellite group EchoStar.

The consortium includes UK-based Apax Partners, U.S.-based Warburg Pincus and Canada Pension Plan Investment Board (CPPIB) and Ontario Teachers’ Pension Plan Board.

Under terms of the deal, Inmarsat shareholders will receive $7.21 in cash per Inmarsat share, which comprises cash of $7.09 for each share plus a previously agreed final dividend of $0.12 per share.

The $7.21 offer represents an almost 45 percent premium to Inmarsat’s close on Feb. 27, a day before media reports said EchoStar was expected to renew its interest in the company.

The consortium’s approach, which was made on Jan. 31 and revealed last week, comes after Inmarsat rebuffed a $3.25 billion cash and stock bid from EchoStar, saying the offer undervalued the company.

Inmarsat, a long established provider of communication services to shipping, sees a growing opportunity to supply in-flight broadband services to commercial aircraft.

Inmarsat has been investing heavily in its networks and as a result cut its dividend last year.

(Reporting by Justin George Varghese in Bengaluru; Editing by Bernard Orr)

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