Gilat Satellite Networks Ltd. (GILT) has been sued in a securities class action in the Jerusalem District Court. Gilat announced on October 16 that the respondents named in the suit are the company, all its directors and York Capital Management LLC, which owns 20% of the company. According to Gilat, the company and its outside legal counsel believe the claims are “outlandish and completely without merit, and that the lawsuit is without basis.”
The plaintiffs claim damages based on the amounts they would have been paid had the acquisition of Gilat for $475 million by an Israeli-US consortium gone ahead. The consortium comprised Mivtach Shamir Holdings Ltd. (TASE:MISH); private equity group Gores Group LLC; Roy Ben-Yami, Ami Lustig, and Eytan Stibbe, the owners of LR Group; and DGB Investments, a company owned by VeriFone CEO Douglas Bergeron.
Gilat stated that it “cancelled the March agreement, citing the consortium’s intentional breach of the merger agreement and failure to close the merger and is seeking a $47.3 million penalty. The consortium rejects the claim and that it should pay this penalty.”
For more information on how the class action system works in Israel, see the following papers found on Stanford Law School’s Global Class Actions Exchange: