Gilat Satellite gives investors 72 hours to close merger deal

By Lisa Kerner

Charlotte, N.C., Aug. 25 - Gilat Satellite Networks Ltd. said a consortium of investors notified the company it will not close the merger transaction at the agreed-upon price of $11.40 per share.

According to Gilat, the consortium has 72 hours to complete the definitive merger agreement before the company seeks all remedies, including legal action.

The investor group includes the Gores Group LLC, Mivtach Shamir Holdings Ltd., companies affiliated with Roy Ben-Yami, Ami Lustig and Eytan Stibbe and DGB Investments, Inc.

Gilat said its board of directors rejected a number of new verbal proposals from the investors that were "substantially different" from the definitive agreement.

The definitive merger agreement provides for a termination fee of $47.3 million, payable to Gilat in the event of an intentional breach of the agreement by the purchasers, a company news release noted.

"It is disappointing that the definitive agreement, which was achieved after 11 months of intense due diligence and negotiations, has not been honored by the purchasers as of yet," Gilat chief executive officer and chairman of the board Amiram Levinberg said in the release.

It was previously reported that the consortium questioned whether or not Gilat has fulfilled all of the required closing conditions under the parties' March agreement.

Gilat maintains that it has met the conditions and has notified the investor group that the conditions were met.

In July, Gilat shareholders approved a $475 million buyout of the company by Galactic Holdings Ltd. and Galactic Acquisition Co. Ltd.

Based in Petah Tikva, Israel, Gilat provides internet protocol-based digital satellite communication and networking products and services. The company produces very small aperture terminals and related network equipment.

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