Gilat files suit against consortium members to force payment of $47.3 million termination fee

By Lisa Kerner

Charlotte, N.C., Nov. 5 - Gilat Satellite Networks Ltd. filed lawsuits in Tel Aviv District Court against members of the consortium of proposed buyers in order to collect the $47.3 million termination fee under the parties' March 31, 2008 merger agreement.

Named in the lawsuits were Mivtach Shamir Holdings Ltd., LR Group Ltd., Gores Capital Partners II, LP and DGB Investments, Inc., according to a Gilat news release.

The consortium had agreed to acquire Gilat for $11.40 per share.

Gilat said it terminated the agreement based on the buyers' intentional breach of the agreement and failure to close the merger by the extended deadline of Aug. 28.

The buyers have rejected claims that the payment is due, the release said.

It was previously reported that eight individuals and Israeli companies filed a class-action lawsuit in the district court of Jerusalem against Gilat, all of its directors and its 20% shareholder, York Capital Management.

According to Gilat, the plaintiffs are seeking damages based on the amounts they would have been paid had Gilat's merger with the consortium of buyers closed.

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

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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