Gilat Satellite Networks (GILT) Terminates Merger Agreement with Consortium of Buyers; Will Receive $47.3M Termination Fee

August 29, 2008 10:00 AM EDT

Gilat Satellite Networks Ltd. (NASDAQ: GILT) announced today that it has notified the consortium of buyers that had agreed to purchase the company that it was terminating the Agreement and Plan of Merger entered into on March 31, 2008. Gilat cited the buyer's intentional breach of the merger agreement and failure to close the merger transaction prior to 5:00 P.M. New York Time on August 28, 2008, the extended time established to complete the transaction.

Since notifying the Purchasers of the requirement to close the transaction on or before August 28, 2008, Gilat received numerous verbal proposals from the Purchasers, all of which were substantially different from the agreed upon terms in the definitive agreement. Gilat's Board of Directors unanimously determined not to accept these verbal proposals and to terminate the Agreement and Plan of Merger as of August 28, 2008.

The definitive agreement provides for a termination fee in the amount of $47.3 million, payable to Gilat by September 10, 2008, in the event of an intentional breach of the agreement by the Purchasers.

Gilat Satellite Networks, Ltd., together with its subsidiaries, provides Internet Protocol (IP) based digital satellite communication and networking products and services worldwide.

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