Shares in satellite company Eutelsat surge on bid interest from Drahi

Shares in satellite company Eutelsat surge on bid interest from Drahi

Shares in French satellite company Eutelsat (ETL.PA) surged on Thursday after the company rejected a bid proposal from billionaire Patrick Drahi, whose business interests include auction house Sotheby’s and media group Altice.

“Eutelsat Communications confirms that the proposal received from Mr. Patrick Drahi – and rejected unanimously by the relevant governance bodies of the company – prices Eutelsat at 12.10 euros per share, all dividend attached,” it said.

Eutelsat shares were up by 15.6% at 11.97 euros in early trade – just below Drahi’s bid proposal – and giving the company a stock market value of around 2.4 billion euros ($2.8 billion).

Reuters earlier reported that Drahi had made a bid approach for Eutelsat and held talks with its top investors including state-backed Bpifrance which has a 20% stake in the company.

Analysts at Credit Suisse wrote that the presence of the French state’s shareholding in Eutelsat, via Bpifrance, could be the main hurdle to a deal going through, given how satellites are a strategically important asset for France.

“Let’s not forget the French state gave Eutelsat a very sizeable tax break two years ago so how do you justify to the taxpayer/voter it is okay to now let a Swiss-based oligarch to pocket this tax break?,” added a London-based analyst.

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