Gilat drops 10% as merger talks hit a road bump

Gilat Satellite Networks Ltd. (Nasdaq:GILT) saw its shares dip by nearly 10% to a new 52-week low this morning after the company reported that its planned $475 million acquisition by a group of private investors may not materialize.

In a statement issued at 5 a.m. today, Petah Tikva, Israel-based Gilat said the investors who had agreed to buy the company for $11.40 a share have “made a number of new verbal proposals which were substantially different from the definitive agreement” despite Gilat’s meeting all conditions precedent to closing.

Gilat rejected the verbal proposals, saying they were not in the best interest of its shareholders. It notified the purchasers they have 72 hours to complete the definitive merger agreement or they will consider legal action.

The original merger agreement provides for a termination fee in the amount of $47.3 million, payable to Gilat in the event of an intentional breach of the agreement by the purchasers.

Gilat, a provider of products and services for satellite-based communications networks, is at $7.80, down $0.84 from Friday's close, after trading as low as $7.50 earlier in the day. Previously the stock had traded between $8.35 and $11.34 during the past 52 weeks.

For detailed price information and news stories on Gilat, click GILT.

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