Shares of Gilat Satellite Networks Ltd. (NASDAQ: GILT) are trading lower this morning after earnings and merger news. The satellite communications and networking company posted $0.03 EPS versus $0.12 estimates on a revenue decline of 6.7% to $65.3 million (1 estimate of $74M).
Gilat has also said that the proposed buyers of the company haveverbally indicated that they will not close upon the $11.40 proposedmerger agreement. Gilat also noted that the company told the buyers onAugust 5 that the conditions to the merger had been met. The companyfurther states that the buyers have verbally changed the terms to thecompany which were substantially different than the initial purchaseterms.
Gilat said the buyers have 72 hours to to complete the merger or theywill pursue remedies or legal action which would allow the company toseek the $47.3 million termination fee if the buyers breach theagreement.
Earlier this month we had seen shares plummet from north of $11.00 tounder $9.00 recently. Very few investors really expected this deal toclose. Shares are down another 15% at $7.50 in active pre-market trading. Chalk this one up as another 52-week low.
Jon C. Ogg
August 25, 2008
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