Commercial satellite Earth imagery provider DigitalGlobe has formally turned down an offer from rival GeoEye to buy the company for $17 per share in a combination of cash and stock.

DigitalGlobe says its board of directors reviewed GeoEye's unsolicited acquisition proposal and unanimously rejected it, noting that it substantially undervalued the company in relation to DigitalGlobe's standalone business and financial prospects.

DigitalGlobe says GeoEye made previous private proposals in February, which the company believes were motivated by GeoEye's concerns over the disproportionate risks of government budget cuts affecting its business.

DigitalGlobe was apparently less in favour of a takeover than a merger. DigitalGlobe was willing to discuss the acquisition of GeoEye, in which DigitalGlobe's stockholders would own approximately 60% of the combined company with GeoEye stockholders holding 40%. The joint firm would have been headed up by DigitalGlobe chairman Gen Howell Estes and chief executive officer Jeffrey Tarr. While those discussions ended when GeoEye made its hostile bid, DigitalGlobe again reiterated its offer. This was rejected by GeoEye.

Both GeoEye and DigitalGlobe now await the US government's decision on the value and split of its EnhancedView imagery purchase programme.

Source: Flight International