Colorado, USA: DigitalGlobe Inc. rejected a USD 792 million takeover bid from its rival GeoEye Inc., by stating that GeoEye undervalued the company. It also said that the bid was not in the best interest of the company’s shareholders.
Earlier, GeoEye had offered the USD 17 per share hostile bid for DigitalGlobe after holding talks with its target over several months. The bid was a 26 percent premium over DigitalGlobe’s closing price of USD 13.52.
GeoEye’s USD 17 per share bid was a mix of cash and stock. GeoEye had said it could change the offer to be just cash or could increase the offer by including more stock.
According to media report, GeoEye has a smaller market capitalisation than DigitalGlobe, making it a somewhat unlikely acquirer, but it has higher revenue and is profitable.
DigitalGlobe operates three high-resolution satellites, and lost USD 27 million on USD 339.5 million in revenue last year. On the other hand, GeoEye has two satellites and had net income of USD 46.9 million on USD 356.4 million in revenue last year.
Source: Business Week