US satellite company EchoStar dropped its proposed takeover bid for UK-based rival Inmarsat, making an about-turn just minutes before it was due to make a formal offer.
EchoStar made an informal £3.2 billion bid for Inmarsat last week, its second approach after an initial bid at the start of June, but both were rejected for undervaluing the company.
The satellite company revealed details of its bid on Friday morning (6 June) and was set to make a formal bid later that day.
However, Financial Times reported the US company said it would not be making a formal offer 27 minutes before a deadline.
EchoStar is now unable to make a bid for the company for six months, unless Inmarsat’s board approaches it or a rival offer is made.
France-based rival Eutelsat considered making an offer for Inmarsat in June, before pulling out after its interest become public. FT said private equity buyers could also be in the running, but any international takeover is likely to face political scrutiny due to security concerns.
EchoStar revealed its latest offer amounted to 532p a share, a 46 per cent premium on Inmarsat’s share price from the day it first announced its interest in May.
Last month, the US company also disclosed it owned a 3 per cent stake in Inmarsat, as well as a significant bond holding.
Inmarsat said it has confidence in its future as an independent company, while maintaining EchoStar’s improved offer was still “significantly” below the value of the company.