After the market close on Friday, US rival EchoStar Corporation (NASDAQ:SATS) – which has been building up a stake in the UK group – said it does not intend to make a formal offer for Inmarsat, having seen another indicative proposal rejected by the firm earlier that day.
In a statement in response to the Echostar statement, Inmarsat said its board “remains highly confident in the independent strategy and prospects of Inmarsat, given our track record, unique capabilities, differentiated market position and strong channels to market.”
It added: “Inmarsat will publish its interim year results for the period to 30 June 2018 on 2 August 2018 and will update the market on the Company's progress at that time.”
In late morning trading on Monday, Inmarsat shares were up 4.1% at 503.6p.
In a note to clients, analysts at Morgan Stanley noted: “Inmarsat shares traded below 400p before Echostar made its first approach vs around 500p today and recent highs of 632p.
“Though there may be some disappointment in the market at the lack of an offer when the dust settles, there has been an interested buyer at 532p, Echostar still has a sizeable stake in the company and they theoretically could decide to return after 6-months.”
Inmarsat shares plunged on Friday after the satellite group rejected the second offer from US rival Echostar.
The bid, formally lodged on July 3, was a mixture of cash and shares totalling 532p for each Inmarsat share, valuing the FTSE 250 firm at £3.2bn including debt.
Inmarsat responded by claiming that the offer "very significantly undervalued" the company and its prospects.
The London-based company rejected out of hand an initial multi-billion pound approach from Echostar last month.
The US group’s offer was some way below what some analysts had been expecting. RBC Capital said in a note to clients last week that it thought 650p might be the opening offer but expected a bid of around 750p to tempt shareholders.
RBC also noted that without a recommendation from the board, an Echostar bid is unlikely to succeed with its approaches.
The Canadian bank said: “Given the political backdrop (sensitive satellite infrastructure) we believe Echostar is likely to need a recommended offer as a hostile bid could allow the company to seek political protection.”
At the end of last month, Eutelsat Communication SA also revealed that it does not intend to make an offer for Inmarsat, just a day after the French satellites group said it was considering making a bid.
The French firm added that it is consequently, bound by the Takeover Code not to make a bid during the following six months except with the consent of the UK Takeover Panel unless Inmarsat’s board agrees, or a third party announces a firm intention to make an offer.
Echostar has to adhere to the same Takeover Code rules.