Inmarsat Share Discussion Threads

[steeplejack] 25/3/2019 07:16

As suspected,the management have opted for the cosy private equity deal.The private clients have been stuffed by acceptance of a lowball bid.I see it as unlikely that a third party will try to gatecrash an agreed offer.

[extrader] 22/3/2019 10:00

Well, in old world technology , they do say that the most dangerous part of a car is the nut holding the wheel....;-<<br />
ATB

[argylerich] 22/3/2019 08:31

Lol, so much for smart devices ;-)

[extrader] 22/3/2019 08:05

Hi ArgyleRich,

You're right !

My bad : I was reading on a smartphone and the column didn't justify...or it did and I didn't see.

Shoulda gone to specsavers !

ATB

[argylerich] 22/3/2019 07:03

Definitely in the column for "interests" as opposed to the separate one for shorts. Who knows what was in their mind, that the rise was a false one so they sold into it?
Whatever the reason, they look to have misjudged.

[extrader] 22/3/2019 03:27

Hi Argyle Rich,
Seems unlikely ! Isn't it a SEPARATE short - of 1.32% - in the convertible bonds.....
Or am I misreading?

Curious move, in either interpretation !
ATB

[argylerich] 21/3/2019 19:54

Fascinating RNS from Portsea Asset Management. Most aggressive shorter over the last month, building a negative position of 0.97% before the approach was revealed. Turns out they also have a positive position of 1.32%! Hedge funds hedging for the ride both ways?

[extrader] 20/3/2019 19:37

Hi steeplejack,

Thanks for the Alphaville detail.

When you comment at the end re timing of disclosure, this may have been dictated by the 'no dividend' element of the proposal clashing with the timetable for dividends announced by ISAT :

..."The dividend is to be paid on 30 May 2019 to ordinary shareholders on the share register at the close of business on 23 April 2019. Shareholders will be ASKED TO APPROVE the final dividend payment at the Annual General Meeting on 1 May 2019. …"

With a record date of 23 April for the dividend, management may have wanted to orchestrate a gentle 'put up or shut up' date - 16 April in this case - that would help focus everyone's minds.

Just a thought !

ATB

[steeplejack] 20/3/2019 18:52

Below are extracts from FT Alphaville today.I’ve tried to make the blog as readable as possible.Lengthy but worth scanning.

Inmarsat PLC (ISAT:LSE): Last: 516.60, up 78.8 (+18.00%), High: 516.80, Low: 500.76, Volume: 11.77m

Seems this was the UK takeover that's been muttered about for a while now, so everyone can stand down. Course, if Inmarsat had told us about it six weeks ago when the approach arrived, there wouldn't have been quite so much gossip around ......

And there was speculation around in the press -- -- just that it was pointed towards trade rather than PE.

Anyway. Let's recap where we are.

I'll let Goldman do it .....
Following press reports (FT) about a potential PE offer, Inmarsat has confirmed it received a non-binding proposal from a PE consortium on 31 January regarding a possible cash offer at $7.21 (equates to 542p at 1.33 FX), a c24% premium to March 19 closing share price (438p). We note the PE consortium now has until 16 April to make a firm offer. ISAT notes the proposal remains under discussion between ISAT and the PE consortium.

Among the bid consortium, Apax is the most interesting name.
Firstly because Apax used to own Inmarsat.
Secondly, because its owns Marlink, which sells Inmarsat satphones for boats.
It's one of the key distributors. Which makes this look relatively friendly, potentially. Which is a point Exane makes......
We think Inmarsat's management is likely to favour a takeprivate
bid (vs. a take-over scenario) especially if it comes with the strategic benefit of closer integration with Marlink.

Course, against that we have to spin back to the robust rejection Echostar was given just eight months ago.

Its bid being 532p, of which 265p was cash, so basically no different in terms of headline valuation to the PE one.
Roidster One just raised 1.5bln.....softbank may come in ...thoughts?

"If you engage at a level that's way below what you think is the right level, all you're doing is signaling weakness and a willingness to trade value below fair value"; "And after all, we're not for sale. We don't feel weak about our future and we don't feel the need to engage in a merger even with somebody in our industry at this point in time. We don't think that will drive exceptional value for shareholders beyond the value they've paid on the way into that kind of environment. So, that's why we did not engage".

That was Inmarsat's CEO in August.

Next, we have to examine the conspiracy theory angle.

Here's Jefferies:

The decision to unilaterally disclose the Consortium's six-week-old non-binding cash bid, almost identical in value to the rejected 3-Jul-18 EchoStar bid, feels like a well-advised "stalking horse" that could well now result in a revised bid (from either suitor).
Except it wasn't unilaterally disclosed. It was in response to a specific report, so that doesn't quite work.

And to follow that, we need to get knee deep in the binary value around Ligado (the former Lightsquared, messes with GPS, you remember) and strategic value to Charlie Ergen .....

[losos] 20/3/2019 17:30

dexdringle - "I can't see much evidence of "fending off" going on this time"

Haha yes, needs a much more robust response.

[eipgam] 20/3/2019 16:46

from the bbc a little earlier...

15:24
Why hasn't Inmarsat risen more?
INMARSATCopyright: INMARSAT

Earlier we mentioned that satellite firm Inmarsat had received a takeover approach. The shares have risen 16% to 510p - but below the potential offer price which is around 543p.

Why? Helal Miah, investment research analyst at The Share Centre, says it is not a definite offer, the company has fended off takeover approaches in the past and the offer was made before the full year results which were "fairly encouraging".

“Therefore we believe once again Inmarsat may argue to remain independent and not recommend this offer to shareholders which we believe explains why the shares [are] not trading closer to the takeover price".

[ptgint] 20/3/2019 16:22

I,too, am like most of you guys agreeing with Undervaluedassets and also requiring circa 700p to get out clean. Lets hope for but not expect a counter bid.

[wad collector] 20/3/2019 12:57

I make the offer 721 @1.32 USD = 546p
The share price is currently hovering around 510p which suggests that the market does not view this as the opening salvo of a bidding war, but a bid that might fail .
As EI says ; good move if you recently bought in. Sadly not me.
I await a bidding war with more hope than enthusiasm.

[essentialinvestor] 20/3/2019 12:29

Congrats guys, lovely result for those who bought recently.

[dexdringle] 20/3/2019 12:22

"Losos - .......in the meantime they have to fend off the takeover approaches"

I can't see much evidence of "fending off" going on this time !

[zcaprd7] 20/3/2019 12:09

Nah, I'm sticking with my previous target, 10 pounds odd. The PE bid will flush out echostar and Softbank...

[rogerrail] 20/3/2019 10:47

I doubt whether $7.42 is the final pitch from Apax et al, and of course Echostar could come back with a counter offer. Regardless, unless there is significant news in the offing , my guess is that around $8 will take this out and that seems a very likely outcome.

[losos] 20/3/2019 09:52

dexdringle - "$7.42 = £5.40. Not exactly Christmas is it ?

I need £7 a share to break even..."

Pretty much the same position for me. As someone said ISAT share price should be £10 but only after the full benefits of the in flight internet connection thingy is realised and that could take another year or so, in the meantime they have to fend off the takeover approaches. Clearly ISAT is undervalued but sadly that doesn't mean that they won't get taken out at well below £10 I can see all us small PI's having an offer on the table below true value (and likely below what we bought at) and having to accept because the big boys have stitched us up.

Time will tell, hope I'm wrong, but it's a jungle out there haha.

[steeplejack] 20/3/2019 09:47

Undervaluedassets is quite right.Theres something very unsatisfactory about a private equity outfit sneaking in and buying an incompetently run outfit from under the noses of long suffering shareholders.Hopefully,the bid approach will flush out interest from Echostar and the like.Arguably,ISAT has made progress on the inflight broadband front.

[jurgenklopp] 20/3/2019 09:39

I would have thought that Echostar will come back with a counter offer too as the potential new bid is only 10p above their original offer.

It'll all get too much for the frankly incompetent ISAT board to fully digest !!

:o)

[extrader] 20/3/2019 09:33

Hi all,

..." nine months ago, EchoStar offered 532p a share and the board considered that "very significantly undervalued Inmarsat and its standalone prospects"...

I think in part because EchoStar wasn't offering all cash and there's some question-mark about the value of their paper...

ATB

[steeplejack] 20/3/2019 09:18

The management will probably try to discern whether they will have a better future with a private equity outfit than a public company.A public company that will kick them out and put in their own team.

[undervaluedassets] 20/3/2019 08:52

I hate it when my shares get bought out.

Why...?

because someone else has got my shares on the cheap.

Predators only move where they see value and opportunity, and unlike us, they have huge staffs to do proper due diligence on what it is that they are buying.

Yes, we may get some cash but they will get the value.

I was massively long SKY and was very unhappy to say goodbye to that one.

[porsche1945] 20/3/2019 08:42

Fire sale price, future is aviation wifi, need to hold their nerve and see it through rather than sell it on the cheap to private equity sharks on the cusp of something good, these should be back to 10 quid a share. Its a shame the board of this company are such poor quality, typical cxxp british execs.

[dexdringle] 20/3/2019 08:39

wad collector20 Mar '19 - 08:35

"Dexdringle , because the situation has changed...."

What, in nine months ?