He's at it again.
French billionaire Patrick Drahi, who recently blindsided BT's top brass with a surprise 12.1% equity grab in the UK incumbent, has made an unsolicited takeover bid for Paris-based Eutelsat.
The satellite operator was having none of it, judging Drahi's initial approach – reported first by Reuters – as way off-beam.
Figure 1: No thank you: Eutelsat has told French billionaire Patrick Drahi where to get off when it comes to take over bids.
(Source: Ecole polytechnique on Flickr CC 2.0)
In a terse statement, Eutelsat confirmed that it had received a proposal from Drahi that priced Eutelsat at €12.10 ($14.02) per share, and that the offer was "rejected unanimously by the relevant governance bodies of the company."
Eutelsat's share price surged to €11.85 ($13.73) in early afternoon trading on the back of Drahi's interest, giving the company a market capitalization of around €2.4 billion ($2.8 billion). At close of trading in Paris yesterday, the share price was €10.35 ($12.00).
"Drahi seems to be following Elon Musk and Jeff Bezos with his interest in satellites," James Crawshaw, a principal analyst at Omdia, told Light Reading. "The offer for Eutelsat seems to be at a very low premium and this is after five years of decline. I'm not sure what value he can bring to the business other than loading it up with debt and running it for cash."
Grounded (for now)
Drahi is controlling shareholder of Altice, a highly acquisitive (and highly leveraged) telecoms and media group, whose assets lie firmly in the ground. According to the Financial Times, Drahi has no plans to merge Eutelsat with Altice and would keep the French firm within a separate holding company.
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Conor O'Shea, an analyst at Kepler Chevreux – again, as reported by the Financial Times - wrote in a note that the Drahi bid was "credible" but would be more acceptable for Eutelsat's board if it was around €14 ($16.22) a share.
Another potential stumbling block for Drahi's apparent satellite ambition, according to analysts at Credit Suisse, is having to deal with state-backed Bpifrance, which has a 20% stake in Eutelsat. The company's satellites, they point out, are a strategically important asset for France.
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— Ken Wieland, contributing editor, special to Light Reading
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