Gilat Satellite Networks Ltd. (Nasdaq: GILT; TASE: GILT) has announced that a lawsuit was filed against the company with the Jerusalem District Court. The eight plaintiffs have requested that the lawsuit be approved as a class-action suit. The respondents are the company, all its directors and York Capital Management LLC, which owns 20% of the company.
The plaintiffs claim damages based on the amounts they would have been paid had the acquisition of Gilat for $475 million by an Israeli-US consortium gone ahead. The consortium comprised Mivtach Shamir Holdings Ltd. (TASE:MISH); private equity group Gores Group LLC; Roy Ben-Yami, Ami Lustig, and Eytan Stibbe, the owners of LR Group; and DGB Investments, a company owned by VeriFone CEO Douglas Bergeron.
Gilat said that it and its outside legal counsel believe the lawsuit is "outlandish and completely without merit, and that the lawsuit is without basis." Gilat added that it intends to use all legal means necessary to protect and defend itself and its directors. The plaintiffs did not make any demands of the company nor did they provide notice prior to filing their lawsuit.
Gilat cancelled the March agreement, citing the consortium's intentional breach of the merger agreement and failure to close the merger and is seeking a $47.3 million penalty. The consortium rejects the claim and that it should pay this penalty.
Gilat rose 1.6% on Nasdaq on Friday to $3.92, giving a market cap of $156 million. The share fell 1% in morning trading on the TASE today.
Published by Globes [online], Israel business news - www.globes-online.com - on October 19, 2008
© Copyright of Globes Publisher Itonut (1983) Ltd. 2008