Eutelsat walks away from bid for Inmarsat in rapid U-turn
US firm EchoStar has also expressed an interest in London-based Inmarsat.
Inmarsat shares have fallen after Eutelsat Communications, a European satellite operator, said it does not intend to make an offer for the business.
Paris-based Eutelsat said on Monday that it was considering a possible bid for Inmarsat, days after US satellite firm EchoStar snapped up a 3% stake in the company, leading to speculation that it would launch a bid.
However, Eutelsat has now ruled out a takeover of its British rival, sending Inmarsat’s shares down 7.5%, or 45.8p to 587.8p.
Inmarsat confirmed in June that it had received a “highly preliminary and indicative non-binding proposal” from Echostar.
However, Inmarsat, which is based in London, rejected the initial takeover bid, saying that it significantly undervalued the business.
“The board remains highly confident in the independent strategy and prospects of Inmarsat,” it said.
Echostar has until July 6 to make a firm offer for Inmarsat under UK takeover rules.
Analysts have speculated that other potential bidders for Inmarsat include other satellite firms such as SES and Viasat.