{"id":64686,"date":"2018-07-12T18:14:52","date_gmt":"2018-07-12T10:14:52","guid":{"rendered":"https:\/\/wp-productionenv-bjg9h2g2bgg5b8aa.southeastasia-01.azurewebsites.net\/news\/inmarsat-pressured-for-its-vision-after-rejecting-echostar\/"},"modified":"2018-07-12T18:14:52","modified_gmt":"2018-07-12T10:14:52","slug":"inmarsat-pressured-for-its-vision-after-rejecting-echostar","status":"publish","type":"post","link":"https:\/\/starpath.global\/news\/inmarsat-pressured-for-its-vision-after-rejecting-echostar\/","title":{"rendered":"Inmarsat Pressured for its Vision After Rejecting EchoStar"},"content":{"rendered":"<\/p>\n<p>Following the rejection of a $3.2 billion takeover bid from <strong>EchoStar<\/strong>, U.K. satellite operator <strong>Inmarsat<\/strong> is now under pressure to show its vision of the future, said&nbsp;<strong>Berenberg<\/strong> satellite equity analyst Sarah Simon in a July 12 research note. EchoStar has made two bids to acquire Inmarsat, but has been met with stiff resistance. The $3.2 billion follow-up offer was made July 6 and then quickly withdrawn after Inmarsat said the bid \u201csignificantly undervalued the company.\u201d While Simon believes that EchoStar\u2019s pursuit of the company \u201cnow puts pressure on Inmarsat\u2019s management to lay its cards on the table,\u201d she is also skeptical that any combination between Echostar and Inmarsat will be consummated, due to a lack of any obvious material synergies between the two companies.<\/p>\n<p>\u201cGiven the confidence of Inmarsat\u2019s board that [EchoStar\u2019s bid] significantly undervalues the company on a standalone basis, we expect some pressure from shareholders for management to back up this claim with some positive communication,\u201d Berenberg said. \u201cShareholders need to be careful with what they wish for, however; those who have followed the stock over recent years have witnessed the results of what can happen if management looks through rose-tinted glasses. Visibility and timing of any value crystallization remains limited, in our view, and our price target suggests downside to the current share price. We do expect management to be pressured by shareholders into providing more details on the pathway to medium-term value creation, which could reassure investors for now.\u201d<\/p>\n<p>Regarding Inmarsat\u2019s diverse business in key segments, Simon referenced the operator\u2019s first-quarter 2018 results, which showed the operator with slowing government revenues, but 60 percent profit margin in its aviation business. She expects these trends to reverse for Inmarsat in the second quarter. \u201cWithin government, [Inmarsat\u2019s manufacturing contract with] <strong>Boeing<\/strong>, which is take-or-pay and inherently lumpy, was at its lowest in Q1 and should be higher in the remaining three quarters of the year,\u201d she said. \u201cWith regards to aviation, we expect that the timing of increased equipment installations, aviation exhibitions and joint marketing with airline partners could result in Q2 being the lowest aviation margin quarter of the year. We therefore forecast a material drop in aviation margin from 60 percent in Q1 down to 40 percent for Q2.\u201d<\/p>\n<p>Speculation about Inmarsat\u2019s next moves will likely continue over the next few months. While the operator\u2019s share price has been boosted by recent activity, Berenberg seems likely to keep its \u201chold\u201d rating on the stock and still remains cautious about its prospects for growth. \u201cWith ongoing speculation likely to continue, and perhaps a now more bullish management stance, we expect this premium could continue over the coming months,\u201d said Simon. \u201cM&amp;A aside, however, we do not believe the shares offer value at the current levels.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Following the rejection of a $3.2 billion takeover bid from EchoStar, U.K. satellite operator Inmarsat is now under pressure to show its vision of the future, said&nbsp;Berenberg satellite equity analyst Sarah Simon in a July 12 research note. EchoStar has made two bids to acquire Inmarsat, but has been met with stiff resistance. The $3.2 [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":53419,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":"","_links_to":"","_links_to_target":""},"categories":[2],"tags":[],"class_list":["post-64686","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news"],"acf":[],"_links":{"self":[{"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/posts\/64686"}],"collection":[{"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/comments?post=64686"}],"version-history":[{"count":0,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/posts\/64686\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/media\/53419"}],"wp:attachment":[{"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/media?parent=64686"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/categories?post=64686"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/tags?post=64686"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}