GeoEye is a provider of earth imagery, image processing services and imagery information products to the United States and foreign government defense and intelligence organizations, domestic federal and foreign civil agencies, and commercial customers.
DigitalGlobe rejects GeoEye’s $792.3-mln takeover offer
GeoEye (NASDAQ:GEOY) reported that rival satellite imagery company DigitalGlobe has rejected its proposed $792.3 million
Herndon, Virginia-based GeoEye offers high-resolution satellite imagery to local governments, forestry, oil and gas as well as insurance companies.
The proposed deal would have seen DigitalGlobe stakeholders get $8.50 per share in cash and $8.50 in GeoEye stock, for each share of DigitalGlobe.
"We are disappointed that DigitalGlobe's board of directors has rejected our highly attractive proposed acquisition," chief executive Matt O’Connell said in a statement.
Beginning in February, GeoEye made previous unsolicited offers to DigitalGlobe – which its board had rejected.
However, DigitalGlobe was willing to discuss a deal to buy GeoEye where stakeholders would own 60 percent and GeoEye would own 40 percent of the combined company.
GeoEye said it will consider its options in light of DigitalGlobe's rejection.
In a separate news release, DigitalGlobe said it reviewed GeoEye’s unsolicited acquisition proposal and unanimously found that it "substantially undervalues" and is not in the best interests for the company stockholders.
Meanwhile, DigitalGlobe went on to say the proposed transaction does not adequately recognize the company’s superior track record of financial and operating performance.
In a statement, CEO Jeffrey R. Tarr said GeoEye’s bid was made in desperation due to highly publicized concerns about potential government budget cuts that may jeopardize their portion of the Enhanced-View program.
"Although we continue to believe there are merits to an acquisition of GeoEye, we believe that it is in the best interests of DigitalGlobe to await the conclusion of the government budget decision process and to gain clarity with respect to EnhancedView funding."
When the government reaches its decision, DigitalGlobe will consider whether to make a proposal to acquire GeoEye.
GeoEye’s stock slumped 3.54 percent falling to $23.95 each in trade on the Nasdaq. DigitalGlobe saw share prices fall 5.84 percent to $15.48 each in New York.