The threat of a bidding war over Inmarsat sent shares surging nearly 13 per cent.
The satellite communications company revealed it had fended off a takeover approach from US private equity fund Echostar.
Analysts believe the bid could lead to other offers for the British company, which is thought to be worth about £2.4billion.
Into orbit: The threat of a bidding war over satellite communications firm Inmarsat sent shares surging by 12 per cent
But concern about UK companies being snapped up by overseas buyers is growing, with critics warning sensitive technologies are being sold with too little attention paid to security risks.
The 2016 sale of ARM Holdings to Japanese group Softbank in 2016 came under fresh scrutiny last week when it emerged part of the firm had been sold to state-backed Chinese buyers, a deal which experts said posed a potential security risk.
Yesterday analysts said US-based Echostar owns Hughes Communications and DISH, two rival satellite service firms, and that Inmarsat’s spectrum licences would be extremely valuable to it and other operators.
Analysts at RBC said: ‘We believe the situation could become a bidding war between multiple potential bidders.’
Inmarsat is behind technology that tracks aeroplanes and ships, allowing them to communicate with land bases. It controls 13 satellites which are in a fixed orbit around the Earth.
The company was originally set up by the United Nations in 1979 to enable ships to stay in touch with shore or to call for help in an emergency, with its offices located in London’s Euston Tower.
But it was privatised in the 1990s after UN member states refused to pay to improve its network. Since then its value has grown as it has expanded into other services such as mobile phone networks and broadband.
Yesterday its shares closed 12.7 per cent, or 60.1p, higher at 534p. Interest in Inmarsat comes as a host of multinational companies are looking at investing in satellite networks.
Softbank, Google and Facebook are all considering it, while SpaceX has vowed to create a satellite broadband service.
Inmarsat, which employs about 2,000 mostly based in London, gave no value of the Echostar offer in its statement on Friday but said the approach undervalued the firm.
RBC has said its spectrum could be 1000p per share and pointed to other rival communications providers Via Sat, Eutelsat and SES as possible bidders. Inmarsat’s investment in passenger internet services for aeroplanes is also seen as valuable.
Morgan Stanley analysts said buying Inmarsat and the 13 satellites that provide services to airlines, broadcast media companies and the oil and gas industry, could allow Echostar to outpace Via Sat in the race to achieve fully global coverage.
However, others said any takeover could face regulatory hurdles as Britain classes satellite infrastructure as ‘strategic’.