Gilat Satellite's Termination of Merger Agreement is Material Breach of the Agreement, Consortium Formed to Acquire Gilat Says; Gilat Did Not Meet Conditions to Closing

"As Galactic Holdings and the investor group have informed Gilat on a number of occasions, the conditions to closing under the merger agreement have not been satisfied as evidenced by Gilat's operating performance," a spokesman for Galactic Holdings said. "As a result, Galactic Holdings deems Gilat's termination of the agreement a material breach."

"Further," he continued, "Galactic Holdings and the investor group strongly deny all allegations of breach asserted by Gilat."

In addition, Galactic Holdings said, despite the fact that the closing conditions have not been satisfied, in an effort to consummate the transaction Galactic Holdings has made a proposal that Gilat's shareholders should find very compelling and attractive in light of the decline in Gilat's operating performance.

SOURCE: Galactic Holdings Ltd

Sitrick And Company, Inc. Mike Sitrick or Terry Fahn (310) 788-2850 mike_sitrick@sitrick.com terry_fahn@sitrick.com