Deal: Eutelsat Snubs Takeover Bid From French Tycoon Patrick Drahi

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It appears that Patrick Drahi, the French telecoms tycoon, is continuing his acquisition spree around the globe shortly after buying a $3.1bn stake in British carrier BT. But this time, his latest acquisition attempt hit a wall by being rejected.

  • Drahi’s latest acquisition attempt is Eutelsat, a French satellite operator listed on the Euronext Paris exchange. It’s among the top five global satellite operators in terms of revenue.
  • Eutelsat just confirmed with a press statement that it had received an offer from Drahi but rejected it. Though Drahi’s proposed price tag for Eutelsat wasn’t formally disclosed, a Bloomberg report said it was for 2.8 billion euros ($3.2bn).
  • Drahi is known for shrewd dealmaking in the telecoms and cable industries, so it’s not a surprise he pursued acquiring Eutelsat. He built up his telecoms empire primarily with highly-leveraged acquisitions through his Altice corporation, enough to give him a fortune estimated at $9bn by Forbes.
  • It’s said that Drahi sought to buy Eutelsat through a personal investment vehicle of his rather than through his Altice corporation. He may want to use Eutelsat as a platform to pursue more deals in the fragmented satellite industry under a new roll-up holding company.
Eutelsat provides satellites used by cable and radio operators to broadcast their stations around the globe. As cable operators are losing audience on a large scale to cord-cutting, Eutelsat’s revenues from the sector are dwindling, and thus it’s suffered five consecutive years of declining revenues.

With declining revenues that have lagged its stock performance over the years, Eutelsat is an ideal takeover target for a shrewd investor like Drahi. In fact, after this rejection, he may not give up but rather return with a higher offer, depending on how keen he is to close the deal.
  • Eutelsat (EPA: ETL) had a market value of 2.3 billion euros ($2.7bn) before confirming Drahi’s takeover solicitation. Upon confirmation, its stock jumped by nearly 20 percent, giving it a current market value of 2.7 billion euros ($3.1bn).


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