Gilat Satellite Networks Ltd. (Nasdaq: GILT; TASE: GILT) has reputedly received an offer from Hughes Communications Inc. (Nasdaq:HUGH), the company’s US rival. This is not the first time that Hughes has expressed an interest in Gilat; in 2004, the companies were in negotiations for a possible a merger with Hughes Network Systems, which ultimately did not materialize. The failure led to the resignation of Gilat CEO Oren Most. Both Gilat and Hughes Network Systems manufacture very small aperture terminals (VSAT) for satellite communications.
Hughes is thought to have made an acquisition offer a few days ago at $12 per share for Gilat, 37.6% above its market price on Nasdaq. $12 per share reflects a company value of $468 million, compared with the current market cap of $340 million. At its peak in 2000, the company had a market cap of $4 billion. Gilat’s largest shareholder is York Capital Management LLC, with a 20.8% stake.
No formal announcement about the matter has been made by either company.
Gilat rose 11% on Nasdaq and 12% on the TASE yesterday in response to the report, but fell 0.2% in morning trading on the TASE today.
In May, Mivtach Shamir Holdings Ltd. (TASE:MISH offered $11 per share for Gilat. Mivtach Shamir already owns 5.7% of the company and chairman Meir Shamir said a few days after making the offer that he would prefer selling the stake if his offer was rejected. In response to the offer, Gilat hired an investment bank to seek other offers.
Published by Globes [online], Israel business news - www.globes.co.il - on August 14, 2007
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