Satellite firm Inmarsat ditches dividend ahead of $3.4bn private equity takeover

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A pictures shows the offices of satellite operator Inmarsat in central London on March 25, 2014. Inmarsat said it managed to work out which direction the missing Malaysia Airlines plane flew in by measuring the Doppler effect of hourly 'pings' from the aircraft. Malaysia's prime minister announced earlier that the Inmarsat analysis of flight MH370's path placed its last position in remote waters off Australia's west coast, meaning it can only have run out of fuel above the southern Indian Ocean. AFP PHOTO / LEON NEAL (Photo credit should read LEON NEAL/AFP/Getty Images)

Satellite company Inmarsat ditched its dividend today despite narrowing losses.

The UK firm said it was not declaring an interim dividend, having declared a dividend of eight cents per share in the same period last year.

The company said it was cutting its dividend in the light of the announcement of its proposed $3.4bn (£2.8bn) acquisition on 25 March by private equity firms Apax Partners and Warburg Pincus.

Read more: Inmarsat prepares to leave stock market in $3.4bn private equity deal

In the six months to 30 June Inmarsat said revenue was $733.3m, up 2.2 per cent from $717.2m in the same period the previous year.

The company lost $125.2m in the period, an improvement on the $131.8m it lost in the same period the previous year.

Chief executive Rupert Pearce said: “Inmarsat produced a robust performance in the first half of the year, supported by continued traction with Global Xpress, as we continue to focus on building and defending market share in our target markets.”

Global Xpress is the company’s high-speed, mobile satellite broadband.

Its proposed takeover, which has been accepted by shareholders and is scheduled to complete in the fourth quarter of 2019, is subject to a probe by the Competition and Markets Authority (CMA).

Read more: Government intervenes in Inmarsat deal on national security grounds

“The CMA has until midnight on 17 September 2019 to complete and submit this report to the secretary of state,” a government statement said.

The CMA had already launched a competition investigation when it was ordered by the government to investigate the deal on national security grounds.

If completed, the takeover of the British satellite operator would be the second largest public-to-private deal ever in the UK.

US satellite rival Echostar ditched its bid for Inmarsat in July 2018 after tabling an unsuccessful £3.2bn offer, while French firm Eutelsat also scrapped plans for a potential takeover in June 2018.

 Inmarsat’s share price rose one per cent today to 578p.