The group that was to have bought Gilat Satellite Networks (Nasdaq: GILTF; TASE: GILTF) found difficulty in raising finance for the deal and therefore tried to evade fulfillment of the agreement, Gilat claimed today in a statement of claim filed in the Tel Aviv District Court.
Gilat was supposed to have been bought for $475 million, but the deal broke down in August, and now the legal stage has begun. Gilat is claiming the penalty agreed in the contract, some $47 million, divided in proportion to the stakes each of the buyers was to have acquired: Gores Capital Partners II, L.P. is being sued for $16.7 million; Mivtach Shamir Holdings Ltd. and LR Group Ltd. for $13.1 million each; and DGB Investments, Inc. for $4.8 million. Gilat accuses the buyers of "amateurism and superficiality… at best, and, on a worse assessment, lack of bona fides and malicious intent."
The buyers have rejected claims that the payment is due.
The deal was to have been carried out at a price of $11.4 per share for Gilat. Today, the company's share price is $3.76, giving it a market cap of $150 million.
Published by Globes [online], Israel business news - www.globes.co.il - on November 5, 2008
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