[05-07-12] Satellite imagery provider DigitalGlobe<\/b> has unequivocally rejected an unsolicited $792.3 million cash and stock acquisition bid from its imagery sector rival GeoEye<\/b> and called the offer a \u201chostile\u201d attempt to rapidly push the merger along in a statement released May 6.<\/p>\n
\u201c[GeoEye\u2019s] offer substantially undervalues [DigitalGlobe] in relation our standalone business and financial prospects, and is not in the best interests of the company\u2019s stockholders,\u201d DigitalGlobe said in a statement.
\n DigitalGlobe CEO Jeffrey Tarr added his belief that GeoEye placed a, \u201chostile bid in desperation due to highly publicized concerns about potential government decisions that may jeopardize their portion of the EnhancedView program. We intend to await the conclusion of the government budget decision process and to gain clarity with respect to [the U.S. National Geospatial-Intelligence Agency<\/b>\u2019s] NGA\u2019s EnhancedView funding.\u201d
\n The GeoEye proposal would have given DigitalGlobe\u2019s shareholders a total consideration of $17 per share in cash and stock \u2014 a 26 percent premium compared to the company\u2019s closing stock price on May 3. GeoEye CEO Matt O\u2019Connell said he wrote a letter to Tarr on Friday and held discussions recently between the two companies concerning a potential acquisition.
\n \u201cWe are prepared to move quickly on this,\u201d O\u2019Connell said on a May 4 conference call. \u201cOur board of directors would consider restructuring the proposal to increase the purchase price or reduce the cash consideration and increase the stock portion of the offer.\u201d
\n DigitalGlobe confirmed that GeoEye had made previous private unsolicited proposals beginning in early February, which the company also rejected. Tarr said his company offered a counter-proposal that guaranteed continued leadership roles for both himself and DigitalGlobe Chairman Howell Estes and gave DigitalGlobe\u2019s stockholders a 60 percent ownership of the combined company. GeoEye rejected the counter-proposal, according to Tarr.
\n O\u2019Connell said GeoEye was extremely disappointed that DigitalGlobe rejected what he considered to be an attractive acquisition bid.
\n \u201cWe believe, and DigitalGlobe appears to agree, that combining these two companies makes clear strategic sense,\u201d said O\u2019Connell. \u201cA combined company would generate substantial synergies while better satisfying the needs of all customers, domestic and international. The combined company would be able to deliver significantly greater certainty in the continuity and quality of its future satellite constellation. We view this proposal as being proactive to continue to deliver the high level of service to our government and commercial clients in the most cost effective manner.\u201d
\n In a statement issued by GeoEye after the May 4 acquisition bid, O\u2019Connell admitted that the NGA EnhancedView program was a key driver to the bid. \u201cIn the face of significant pressure on the U.S. defense budget and intensifying international competition, a combined company will be better positioned to provide the U.S. government with the time-sensitive geospatial intelligence that is needed to support its mission in a very cost-effective manner during these fiscally conservative times,\u201d he said. \u201cThis proposal delivers exceptional value for the combatant commanders, national decision makers, civil users and disaster relief workers, who have a critical need for unclassified commercial imagery. It also provides benefits for the taxpayer. It offers our Government a way to get the information it needs while still reducing its funding obligations.\u201d
\n Some analysts did raise concerns regarding the possibility that DigitalGlobe\u2019s EnhancedView contract would be the victim of federal cutbacks. But DigitalGlobe recently revealed that the contract had been fully funded for the 2012 year during its first quarter financial reports.
\n Raymond James<\/b> Senior Research Associate Ryan Rackley said that the financial community was surprised by how quickly DigitalGlobe rejected the bid. He added that the hostile language presented in the companies\u2019 response statements could change the tone of their rivalry.
\n \u201cDigitalGlobe and GeoEye have historically maintained an outwardly cordial attitude toward one another, but apparently the gloves have come off now that the two companies are facing the prospect of an EnhancedView death match,\u201d said Rackley. \u201cWe see very little maneuvering room for a combination to occur in this environment, and expect merger discussions to enter a standstill period until EnhancedView budget deliberations are concluded \u2014 potentially in early 2013.\u201d
\nRackley added that he wouldn\u2019t be surprised if GeoEye quickly went back to DigitalGlobe with a higher acquisition bid.
\n DigitalGlobe has maintained that it is not in a position that necessitates a merger, especially since the operator has several other promising assets lined up outside of its NGA EnhancedView contract. The company unveiled the details and capabilities of its upcoming WorldView-3 satellite last month at the National Space Symposium. The satellite, set to launch in mid-2014, aims to extend the capabilities of DigitalGlobe\u2019s commercial imaging constellation and join the company\u2019s QuickBird, WorldView-1 and WorldView-2 spacecraft in orbit.
\n Photon Research Associates<\/b> Founder and CEO James Myer said WorldView-3\u2019s increased identification capability is particularly valuable in a growing number of automated geospatial intelligence applications. \u201cThe sensor capability enhancements planned for the WorldView-3 satellite are likely to be game changers,\u201d Myer said in a research report. \u201cThese significant improvements will make many of the capabilities and business models that we could only dream about in the mid-1990s a reality.\u201d
\nDigitalGlobe Founder, Executive Vice President and CTO Walter Scott added that the new satellite would make DigitalGlobe the only company with multi-band SWIR capabilities.
\n \u201cAs with WorldView-2 before it, WorldView-3 is the most advanced commercial imaging satellite ever built,\u201d said Scott. \u201cWhat\u2019s most important, however, is the increased value these new capabilities will provide our customers. We had many options, and after months of working with both government and commercial customers, we chose to add the SWIR bands that will best address our customers\u2019 needs.\u201d
\n WorldView-3 is currently being constructed by Ball Aerospace<\/b>, which has designed and built all of DigitalGlobe\u2019s operational satellites. The imaging instruments, including the SWIR sensor and optics, were engineered and are being built by ITT Exelis<\/b>.<\/p>\n","protected":false},"excerpt":{"rendered":"
[05-07-12] Satellite imagery provider DigitalGlobe has unequivocally rejected an unsolicited $792.3 million cash and stock acquisition bid from its imagery sector rival GeoEye and called the offer a \u201chostile\u201d attempt to rapidly push the merger along in a statement released May 6. \u201c[GeoEye\u2019s] offer substantially undervalues [DigitalGlobe] in relation our standalone business and financial […]<\/p>\n","protected":false},"author":1,"featured_media":0,"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-83145","post","type-post","status-publish","format-standard","hentry","category-news"],"acf":[],"_links":{"self":[{"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/posts\/83145"}],"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=83145"}],"version-history":[{"count":0,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/posts\/83145\/revisions"}],"wp:attachment":[{"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/media?parent=83145"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/categories?post=83145"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/tags?post=83145"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}