The first shot has been fired in what could become a long and protracted takeover battle for satellite network operator Inmarsat (ISAT).

Inmarsat’s share price rallied around 25% to 525p after the company confirmed a preliminary approach from NASDAQ-listed peer Echostar Corporation. The US firm was given short shrift with Inmarsat quickly rejecting the proposal stating it ‘very significantly undervalued Inmarsat and its standalone prospects’.

Inmarsat has regularly been mooted in the past as a possible takeover target. Echostar appears to be attempting to take advantage of several challenging years for the UK business thanks largely to difficult maritime markets.

Providing communications to shipping is where Inmarsat makes much of its profit. It recently lost exclusivity in supplying distress signal network operations to sea-going vessels.

Analysts believe that satellite rivals, such as ViaSat, SES and Eutelsat, could emerge with bids of their own, although striking a deal may prove complex because of the steep decline in Inmarsat’s share price in recent years.

The stock traded at £11.40 just two and a half years ago, a fact that is likely to see management demand a far larger bid premium than the typical 30% to 35%.

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