FIMI takes control of Gilat Satellite Networks

FIMI's Ishay Davidi

FIMI will invest $25 million to buy a controlling interest from York Capital.

Two years after first investing in Gilat Satellite Networks Ltd. (Nasdaq: GILT; TASE: GILT), FIMI Opportunity Funds is establishing its control of the company. At the same time, York Capital, led by Jeremy Blank, is on the way to divesting itself of Gilat, after owning shares in the company for eight years.

FIMI, controlled by Ishay Davidi, announced today an offer to purchase for 12% of Gilat's share capital for $25.5 million, which will bring its holding in the company to 35%. The share price for the deal is $4.95, compared with the current market price of $4.90, which reflects a $207 million market cap.

In the agreement signed by FIMI and York, York undertook to accept FIMI's offer to purchase. Today, before the agreement between the funds, York owns 14.1% of Gilat, after having sold Gilat shares to FIMI for $10.5 million at the beginning of the year.

FIMI made its first investment in Gilat two years ago, acquiring 11% of the company's shares from institutional entitles at NIS 14.3 a share, or $3.60 a share at the exchange rate prevailing at the time.

It later appeared that the shareholders had reached a deadlock: FIMI, which usually acquires a large stake of the companies in which it invests (in order to be able to institute changes in the company and justify the managerial inputs it invests in upgrading a company), did not manage to increase its holding, being left with about the same stake as York. At that point, it had to decide whether to sell its holdings in Gilat, or try to obtain a controlling interest in the company. FIMI chose the second alternative.

Published by Globes [online], Israel business news - www.globes-online.com - on September 18, 2014

© Copyright of Globes Publisher Itonut (1983) Ltd. 2014

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