Inmarsat accepts cash offer from Private Equity Consortium

The Global Communications company surprises by accepting takeover despite showing signs of improvement

Article updated: 25 March 2019 1:00pm Author: Helal Miah

  • Are we losing control of key companies rather than ‘taking back control’?
  • Another large UK technology group bites the dust following previous mentions from Government that key technology businesses could be protected from foreign takeovers
  • Welcome news for some investors who have seen struggling shares before takeover speculation

Satellite

After rebuffing takeover approaches from rivals last year, Inmarsat has ceded itself to an investment consortium of Apax Partners, Warburg Pincus and two large Canadian pensions investment groups. The acceptance for an all cash offer of $7.21 (roughly equivalent £5.45) comes as a surprise to me as I suggested last week that Inmarsat would hold off given that this offer is only marginally higher than the previous one which at the time management felt undervalued the business. This becomes increasingly surprising now that we have some of the key factors which held the business back, such as the Maritime division, showing signs of abating alongside very good prospects for its In-Flight broadband service. Some investors will welcome this news since the shares have been languishing until recent takeover speculation.

Overseas takeovers – are we losing control?

However, as one of the few large technology groups left in the UK and one that is of strategic and security importance, the government has previously mentioned that these businesses could be protected from overseas takeovers. This became an issue when ARM Holdings was taken over immediately after the EU referendum in 2016. But, given how distracted we are with Brexit, could we actually be losing control of key companies rather than “taking back control”?

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Helal Miah portrait photo
Helal Miah

Investment Research Analyst

After graduating with an economics degree from University College London, Helal started his career within private banking at Smith & Williamson Investment Management and later held analyst and fund manager roles with the Industrial Bank of Japan, Schroders and Mitsubishi Corporation. He is a chartered fellow of the Chartered Institute for Securities & Investment.