Gilat Intends to File Counterclaims Seeking Enforcement of the Merger Agreement or Hundreds of Millions of Dollars in Monetar...
July 12 2020 - 12:39AM
Gilat Satellite Networks Ltd. (NASDAQ, TASE: GILT), a worldwide
leader in satellite networking technology, solutions and services,
announced that further to its announcement of July 8, 2020, it was
notified on July 11, 2020 that an amended complaint was filed by
Comtech Telecommunications Corp. and its subsidiary, Convoy Ltd.,
against Gilat in the Court of Chancery of the State of Delaware.
The amended complaint seeks an additional declaratory judgment that
Gilat has suffered a “Material Adverse Effect” as defined in the
Merger Agreement, as a result of the Covid-19 pandemic and, as a
consequence, Comtech is not required to consummate the merger
because certain closing conditions of the Merger Agreement cannot
be satisfied.
Gilat strongly rejects all such allegations.
Gilat believes that no Material Adverse Effect under the Merger
Agreement has occurred and that Comtech’s complaint is nothing more
than an effort to avoid its clear contractual obligation to acquire
Gilat, due to Comtech’s own rapidly deteriorating performance.
Comtech’s continuous willful breaches have
resulted and are continuing to result in significant monetary
damages to Gilat and its shareholders, and are expected to amount
to hundreds of millions of dollars if the merger is not
consummated.
While Gilat has not interfered or taken any
action to interfere with Comtech’s pending application with the
Russian Federal Anti-Monopoly Service (“FAS”) or otherwise breached
the Merger Agreement, Gilat believes that Comtech has willfully
breached its obligations under the Merger Agreement so as to
attempt to ensure that FAS approval is not timely obtained and
Comtech will not be required to consummate the merger.
Gilat intends to vigorously defend its position in connection
with the claims raised by Comtech and all related matters.
Gilat also intends to file a counter claim
against Comtech seeking, among other things, a declaration that
Comtech cannot terminate the Merger Agreement and, if the merger is
not consummated, Comtech should pay Gilat (on behalf of itself, its
shareholders and optionholders) monetary damages (which are
contractually uncapped) for all losses that Gilat and its
shareholders and optionholders have suffered as a result of
Comtech’s willful breaches of the Merger Agreement, which Gilat
will assert amount to hundreds of millions of dollars.
About Gilat Gilat Satellite Networks Ltd.
(NASDAQ: GILT, TASE: GILT) is a leading global provider of
satellite-based broadband communications. With 30 years of
experience, we design and manufacture cutting-edge ground segment
equipment, and provide comprehensive solutions and end-to-end
services, powered by our innovative technology. Delivering high
value competitive solutions, our portfolio comprises of a cloud
based VSAT network platform, high-speed modems, high performance
on-the-move antennas and high efficiency, high power Solid State
Amplifiers (SSPA) and Block Upconverters (BUC).
Gilat’s comprehensive solutions support multiple applications
with a full portfolio of products to address key applications
including broadband access, cellular backhaul, enterprise,
in-flight connectivity, maritime, trains, defense and public
safety, all while meeting the most stringent service level
requirements. Gilat controlling shareholders are the FIMI Private
Equity Funds. For more information, please visit: www.gilat.com
Cautionary Statement Regarding
Forward-Looking StatementsThis communication contains
forward-looking statements as defined in the Securities Exchange
Act of 1934 and is subject to the safe harbors created therein.
These forward-looking statements involve risks and uncertainties
that could significantly affect the expected results of the
proposed transaction and are based on certain key assumptions. Due
to such uncertainties and risks, no assurances can be given that
such expectations will prove to have been correct, and readers are
cautioned not to place undue reliance on such forward-looking
statements, which speak only as of the date hereof. The
forward-looking statements contained herein include, but are not
limited to, statements about the expected completion of the
proposed transaction with Comtech and the timing thereof, the
satisfaction or waiver of any conditions to the proposed
transaction, anticipated benefits, growth opportunities and other
events relating to the proposed transaction, and Gilat’s plans,
objectives and expectations for future operations, including its
projected results of operations. Forward-looking
statements are often characterized by the use of forward-looking
terminology such as “may,” “will,” “expect,” “anticipate,”
“estimate,” “continue,” “believe,” “should,” “intend,” “plan,”
“project” or other similar words, but are not the only way these
statements are identified. These forward-looking
statements are based upon Gilat’s management’s current estimates
and projections of future results or trends. Such risks and
uncertainties include the risks and uncertainties are described in
the Annual Report on Form 20-F for the year ended December 31, 2019
and in the proxy statement/prospectus dated April 3, 2020 and in
those described in any documents that are incorporated by reference
therein. The list of factors is not exclusive and you should not
place undue reliance on any forward-looking statement. All
forward-looking statements contained herein are made only as of the
date of the document in which they are contained and, except as
required by law, Gilat does not undertake any obligation to update
publicly any of these forward-looking statements to reflect events
or circumstances that may arise after the date hereof.
Contact:
Gilat Satellite Networks Doreet Oren DoreetO@gilat.com
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