Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Gilat satellite networks (GILTF) -- Ignore unavailable to you. Want to Upgrade?

To: jfoley who wrote (293)	4/23/2001 8:46:51 PM
From: Robert T. Quasius	Read Replies (2) \| Respond to of 350

Gilat and rStar Announce Acquisition and Funding of StarBand Latin America Business by rStar rStar to Make a Partial Tender Offer for rStar Shares PETAH TIKVA, Israel & SAN RAMON, Calif.--(BUSINESS WIRE)--April 23, 2001--Gilat Satellite Networks Ltd. (Nasdaq:GILTF - news), a worldwide leader in satellite networking technology and rStar Corporation (Nasdaq:RSTR - news) today announced a series of transactions which will result in the acquisition and funding of Gilat's StarBand Latin America business by rStar. rStar is approximately 51 percent owned by Gilat. Gilat's StarBand Latin America business currently operates satellite-based rural telephony networks in Chile, Peru, and Colombia as well as high-speed consumer Internet access pilot networks in Brazil and Argentina. StarBand Latin America expects to work on a wholesale basis with Latin American ISPs, PTTs and other service providers to offer high- speed Internet access via satellite. Its targeted customer is the small office/home office and select consumer market segments in Latin America, a $2.5 billion market projected by analysts to grow at a five-year compounded growth rate of 41 percent. This transaction is expected by Gilat management to fund the initial business plan for the StarBand Latin America business, which intends to commence commercial operation of its Internet offering in the coming months. The proposed transactions, which have been approved unanimously by Gilat's board and the board of rStar, will be presented to rStar shareholders for approval. Certain shareholders of rStar owning a majority of rStar's common stock, including Gilat, have agreed to vote in favor of the transactions, as described below. Following the consummation of the transactions, both Gilat and rStar are expected to continue to trade as separate entities on The Nasdaq Stock Market. The transaction is expected to close by the end of the third quarter of this year. Transaction Summary Prior to the consummation of the transaction, Gilat-To-Home Latin America (Holland) N.V., itself an indirect subsidiary of Gilat will contribute certain assets related to the StarBand Latin America business to a newly formed subsidiary, StarBand Latin America (Holland) B.V. rStar Corporation has agreed to purchase all of the outstanding stock of StarBand Latin America (Holland) B.V. in exchange for 43,103,448 shares of rStar common stock. In a related transaction, rStar will make a tender offer to acquire, in exchange for up to $4 million in cash and up to 312,500 Ordinary Shares of Gilat, up to 20 percent of rStar common stock held by each shareholder of rStar (other than Gilat and its affiliates). Based on the number of shares outstanding as of April 2, 2001, subject to the 20 percent limitation, for each rStar share tendered, each rStar shareholder (other than Gilat and its affiliates) will be entitled to receive approximately $0.95 in cash and .0738 shares of Gilat stock. Further details on the tender offer will be distributed to shareholders as soon as they are available. The stock portion of this tender will increase Gilat's outstanding share count by less than 1.5 percent, and is not expected to be materially dilutive in any manner. rStar and Gilat have also agreed that rStar will issue and deliver 19,396,552 shares of rStar common stock to Spacenet, a wholly-owned Gilat subsidiary, in full satisfaction of rStar's outstanding capital lease obligations to Spacenet. The conclusion of all of the above-described transactions will result in Gilat and its affiliates' ownership of rStar's outstanding common stock increasing from approximately 51 percent to approximately 80-84 percent. Certain shareholders of rStar, including Gilat, owning a majority of rStar's common stock, have entered into a voting agreement pursuant to which each of them has agreed to vote their rStar shares in favor of the agreement and the transactions described above at a special meeting of rStar shareholders. It is presently contemplated that the special meeting will be held during the third quarter of 2001. rStar Chairman and CEO Lance Mortensen commented, ``The combination of rStar and the StarBand Latin America business provides rStar with a significant business opportunity which is in concert with our previous focus on the Internet and browser-based technology.'' Gilat Chairman and CEO Yoel Gat stated, ``The conclusion of this series of transactions funds the business plan for StarBand Latin America, an opportunity which we believe has great prospects and which we have worked hard to build. Our satellite-based technology is well positioned, and now we have the funding which can move our plan forward.''