Gilat Satellite Networks Ltd. (Nasdaq: GILT; TASE: GILT) yesterday filed lawsuits with the Tel Aviv District Court against Mivtach Shamir Holdings Ltd. (TASE:MISH), LR Group Ltd., Gores Capital Partners II LP., and DGB Investments Inc. to force them to pay the $47.3 million termination fee due to the company after the buyers cancelled their acquisition of it for $475 million.
Gilat's share fell 12% yesterday on Nasdaq to $3.31, giving a market cap of $131 million. The share fell 8.6% to NIS 12.75 by midday on the TASE today.
Gilat is demanding that each buyer pay it their proportional share of the $47.3 million: Gores Capital - $16.7 million, Mivtach Shamir and LR Group - $13.1 million each, and DGB - $4.8 million. Gilat charges that the consortium acted "amateurishly and with superficiality… at best, and in bad faith and malicious intent at worst."
Gilat claims that, just before the deal was to be closed, the buyers disclosed that they were struggling to raise the necessary capital, and that they tried to change the structure of the deal, its terms, and price. From the moment that the buyers encountered financing problems, according to Gilat, they "used every excuse and baseless claim in order to avoid completing the merger and paying their share of the fee for cancelling the agreement."
Gilat noted that the buyers have rejected claims that the payment is due.
Published by Globes [online], Israel business news - www.globes-online.com - on November 6, 2008
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