Market report: Inmarsat goes into orbit on hopes of SoftBank takeover

Chatter that deal-hungry SoftBank founder Masayoshi Son might set his sights on Inmarsat sent shares in the satellite communications firm rocketing today.

The Japanese tech investor’s attempt to merge SoftBank’s OneWeb business with Intelsat fell through today, with Intelsat’s creditors reportedly not backing the $14 billion (£11 billion) deal.

The eccentric Son doesn’t sit still for long and the collapse of the bid for Intelsat — which broadcast Neil Armstrong’s moon walk — soon had rumours flowing that Inmarsat would be his next target.

Reports suggested that SoftBank, which last year bought ARM for £24 billion, has already been in talks with other satellite firms about merging with OneWeb.

Shares in Inmarsat, which dropped out of the FTSE 100 last year after tough conditions in its maritime division, surged 44p, or 5.5%, to 844p in anticipation of a possible takeover.

The London-based firm was among the top risers on the mid-cap index, vying for the top spot with Auto Trader. The second-hand car dealer raced 23.3p, or 5.6%, higher to 439.4p as Barclays upgraded to Overweight ahead of next week’s annual results.

The bank’s analysts said investors had steered clear of the shares, wary that the used-car market might grind to a halt. “There are risks in the outlook for used-car pricing, but we do not expect wide forecourt closures,” they said.

The markets were calmer today after yo-yoing yesterday when the FTSE 100 briefly hit new highs. The index rose 23.66 points to 7543.61 as traders continue to discount Jeremy Corbyn’s chances of winning the election.

BT shares fell 3.4p to 306.15p after Morgan Stanley slashed its rating to Equalweight from Overweight. The investment bank suggested the telecoms giant will have to splash the cash on fibre, with new regulations coming into play next year.

That increased spending might mean it does not have enough free cashflow to cover its dividend, Morgan Stanley added.

Broker downgrades left shares in private healthcare group Mediclinic 28p weaker at 780.5p. Events firm Ascential, formerly Emap, dipped 2.6p to 352.3p after selling its remaining 11 UK-based magazines and trade publications for £23.5 million.