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.