RBC Capital downgrades Inmarsat to 'sector perform'

Inmarsat received an approach from Echostar in June of 532p per share, half in cash and half in stock, which it rejected on the grounds that it "significantly undervalued" the group.

RBC said Echostar's recent approach highlighted Inmarsat's strategic value. "While the-long term value and deal rationale hasn't gone away, the near term catalysts of both China and Ligado appear less likely than they were a few months ago, and Echostar's multiple constrains its ability to bid higher."

It said that while Echostar is probably still interested, it is constrained not just by the six-month standstill but also by its ability to issue equity given its weak multiple. "In our view, Echostar's presence is likely to limit significant downside for Inmarsat's share price," it said.

RBC noted that ISAT's fourth GX satellite appeared to be on the verge of signing a wholesale agreement with the Chinese but this deal now appears dead as the satellite, I5-F4, has moved. In addition, Ligado Networks - a US satellite company with which Inmarsat collaborates - could run into GPS issues again.

At 1250 BST, the shares were down 4.7% to 521.40p.