Gilat Purchasers May Face Litigation
[Satellite Today 08-25-08] A consortium of investors that entered an agreement in March to purchase Gilat Satellite Networks has informed the company that it will not close the merger transaction, according to an Aug. 25 statement by Gilat.
Gilat said it had informed the consortium of investors – the Gores Group LLC, Mivtach Shamir Holdings Ltd., companies affiliated with Roy Ben-Yami, Ami Lustig and Eytan Stibbe and DGB Investments Inc., a company affiliated with Doug Bergeron — that all conditions precedent to closing have been met. The purchasers responded by making a number of new proposals, which were substantially different from the definitive agreement, according to Gilat. These proposals were rejected by Gilat’s as not in the best interest of the company’s shareholders.
Gilat has informed the consortium that its 72 hours to complete the definitive merger agreement or Gilat will seek all remedies at its disposal, including legal action. According to Gilat, a breach of contract requires the investors to pay a $47.3 million fee.
Gilat also announced its results for the 2008 second quarter, reporting revenues of $65.6 million and earning of $1.3 million. In the same period a year ago, Gilat reported revenues to $70.3 million and net income of $5.5 million. Results for the 2008 second quarter included $200,000 of expenses related to the merger agreement.