Sources inform ''Globes'' that the year-long mediation on compensation for the failed takeover of Gilat Satellite Networks Ltd. (Nasdaq: GILT; TASE: GILT) and a group of investors will end with no agreement, and the case will probably return to court.
Gilat, a manufacturer of very small aperture terminals (VSAT) for satellite communications, was due to be acquired by a consortium, Galactic Holdings Ltd., for $475 million, but the deal fell apart in the summer of 2008. The acquisition agreement included a compensation clause, setting a fine of $47 million in the event that the deal was cancelled. Gilat sued the consortium for the money with the Tel Aviv District Court. A year ago, in order to avoid costly legal proceedings, the parties agreed to mediation with Adv. Ram Caspi.
Galactic's members were Mivtach Shamir Holdings Ltd. (TASE:MISH), US private equity firm Gores Capital Partners II LP, LR Group Ltd. , and DGB Investments Inc. (owned by VeriFone CEO Douglas Bergeron).
The mediation was extended over the past year as the parties tried to utilize the process. The deadline for a settlement expires tomorrow, and unless there is a last-minute change, there will be no deal. In that event, the case will go back to court, and the buyers will file a statement of defense.
Mivtach Shamir controlling shareholder Meir Shamir said, "It's true that the deadline for the mediation is Thursday."
Gilat declined to comment.
Gilat's share closed at $5.71 on Nasdaq yesterday, giving a market cap of $230 million. The share price rose 2.1% by midday on the TASE today to NIS 21.29.
Published by Globes [online], Israel business news - www.globes-online.com - on April 14, 2010
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