Paris-based satellite operator Eutelsat has rejected an unsolicited takeover bid from French telecommunications billionaire Patrick Drahi.
“The relevant governing bodies of Eutelsat Communications have unanimously decided not to hold discussions based on the terms of this proposal,” said the company on Wednesday.
Reuters, which first reported the interest of Drahi, said Eutelsat, one of the world’s leading commercial satellite operators, considered the price too low.
One person with direct knowledge of this said Drahi offered to pay Eutelsat € 10.20 per share, with a value of about € 2.3 billion for the inclusion of about € 2.7 billion net debt. Eutelsat shares closed in Paris on Wednesday at € 10.35.
The bid comes just months after Drahi, which owns telecommunications and cable assets in France and the US and the auction house Sotheby’s, have a 12.1 per cent stake in BT, making it the largest shareholder in the UK company. This agreement was a sign of the tycoon’s return after a break of several years on the acquisition front. He also took over his European telecommunications company private last year.
Eutelsat competes with the Luxembourg SES and Intelsat in the United Kingdom and operates 36 satellites over Europe, the Middle East and Africa. The company, which owns 20 percent in the French state, sells capacity to broadcasters, provides broadband services and provides connections to aircraft and ships.
Eutelsat shares are trading lows at all times after five years of declining earnings and declining profits. In April it bought a 24 percent stake in OneWeb, the space-based internet pioneer, for $ 550 million in a substantial expansion bet.
Analysts have predicted a period of consolidation in the satellite sector, as traditional sources of revenue such as TV broadcasts and new competitors such as Elon Musk’s SpaceX trying to build new, cheaper satellite networks closer to Earth.
But a switch to satellite services would be a departure for Drahi, as there would be few synergies with its telecommunications and cable assets.
“It is impossible to say with any conviction why Eutelsat would be of interest to Patrick Drahi at this stage,” Jefferies analysts wrote in a note. “In our opinion, Eutelsat has been in value territory for some time, but its acquisition candidate was much better suited for market consolidation.”
Additional post by Nic Fildes in London