DigitalGlobe Rejects GeoEye's Offer
Commercial satellite imagery company DigitalGlobe rejected the purchase bid from its rival, GeoEye, today.
In a press release, DigitalGlobe stated that GeoEye's offer "substantially undervalues" the company and "does not adequately recognize DigitalGlobe's superior track record ... as well as its [satellite] constellation's greater capabilities."
GeoEye sent a letter to DigitalGlobe President Jeffrey Tarr on Friday offering to buy the company for $17 per share.
Tarr's response today provided a glimpse of the give and take between the two companies over the past year. Noting that DigitalGlobe rejected previous entreaties from GeoEye beginning in February 2012, the press release says that DigitalGlobe had countered with a proposal for it to acquire GeoEye. It said that it repeated the offer after GeoEye's "public hostile offer" on Friday as long as the two could reach agreement over the weekend. "Given GeoEye's rejection of that proposal, DigitalGlobe terminated discussions and will await the government reaching its budget decision regarding EnhancedView. When the government reaches its decision, DigitalGlobe will consider whether to make a proposal to acquire GeoEye," the press release states.
Tarr went further, saying that the "abruptness" of GeoEye's offer on Friday suggests it was made "in desperation due to highly publicized concerns about potential government decisions that may jeopardize their portion of the EnhancedView program."
EnhancedView is the contract from the government's National Geospatial-Intelligence Agency (NGA) through which the government purchases satellite imagery from the two companies for military and intelligence purposes. Rumors are rampant that the government will reduce its purchases.
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