Inmarsat (IMASY) confirms that it received a "highly preliminary and indicative non-binding proposal" from EchoStar (SATS) in relation to the potential acquisition of the entire company. Inmarsat said, "After carefully considering the Proposal with its advisers the Board rejected the Proposal on the basis that it very significantly undervalued Inmarsat and its standalone prospects. The Board remains highly confident in the independent strategy and prospects of Inmarsat."
Google interest ups chances of in-flight Wi-Fi acquisition, says William Blair. "We have seen this movie before" is what William Blair analyst Louie DiPalma says after Bloomberg reported yesterday that Google (GOOG, GOOGL) is in advanced talks to acquire Nokia's in-flight connectivity hardware business. Google joins a long list of technology, telecom, and media providers that have exhibited a strategic interest in in-flight Wi-Fi, "although all have thus far stayed on the perimeter," DiPalma tells investors in a research note. The analyst notes that incumbents Gogo (GOGO), Panasonic (PCRFY), ViaSat (VSAT), Global Eagle Entertainment (ENT), and Inmarsat (IMASY) have invested billions toward satellite capacity and infrastructure. The industry is all about scale and potential new entrants would not have any, DiPalma contends. He believes it would take any new entrant many years to build a network from scratch, obtain regulatory approvals, and procure line-fit partnerships. The analyst thinks Google's interest in in-flight connectivity increases the probability that a tech or telecom company would buy an incumbent in the space. DiPalma has Outperform ratings on ViaSat and Gogo and a Market Perform rating on Global Eagle.
Inmarsat upgraded to Neutral from Sell at UBS. UBS analyst Michael Hill upgraded Inmarsat to Neutral saying the risk/reward is more evenly balanced following the recent underperformance of the shares. The analyst has a 520p price target for the stock.