SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO RULE
13D-1(A) AND AMENDMENTS THERETO FILED PURSUANT TO RULE 13D-2(A)*
Gilat Communications Ltd.
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(Name of Issuer)
Ordinary Shares, NIS 0.01 par value
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(Title of Class of Securities)
M50876107
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(CUSIP Number)
David K. Robbins, Esq.
Fried, Frank, Harris, Shriver & Jacobson
350 South Grand Avenue, 32nd Floor
Los Angeles, CA 90071
(213) 473-2000
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(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
June 30, 2000
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check
the following box |_|.
Note: Schedules filed in paper format shall include a signed original and
five copies of the Schedule, including all exhibits. See Rule 13d-7(b) for
other parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which
would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities
Exchange Act of 1934, as amended ("Act") or otherwise subject to the
liabilities of that section of the Act but shall be subject to all other
provisions of the Act (however, see the Notes).
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SCHEDULE 13D
CUSIP No. M50876107
1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Shamrock Holdings of California, Inc. - 95-3928494
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(See Instructions) (a) [ ]
(b) [ ]
Not Applicable
3 SEC USE ONLY
4 SOURCE OF FUNDS (See Instructions)
WC, OO
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
Not Applicable
6 CITIZENSHIP OR PLACE OF ORGANIZATION
California
NUMBER OF 7 SOLE VOTING POWER
SHARES 1,186,956 Ordinary Shares
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY EACH 0
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON WITH 1,186,956 Ordinary Shares
10 SHARED DISPOSITIVE POWER
0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,186,956 Ordinary Shares
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) [ ]
EXCLUDES CERTAIN SHARES (See Instructions)
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
9.2%
14 TYPE OF REPORTING PERSON (See Instructions)
CO
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ITEM 1. SECURITY AND ISSUER.
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The securities to which this statement relates are Ordinary
Shares of NIS 0.01 nominal value each ("Ordinary Shares"), of Gilat
Communications Ltd., an Israeli corporation (the "Company"). The principal
executive offices of the Company are located at 21/D Yaga Kapaim Street,
Petach-Tikva, Israel.
ITEM 2. IDENTITY AND BACKGROUND.
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(a)-(c), (f). The Reporting Person is Shamrock Holdings of
California, Inc., a California corporation ("SHOC"). All of the capital
stock of SHOC is owned by Shamrock Holdings, Inc., a Delaware corporation
("SHI"). The principal executive offices of SHOC and SHI are located at
4444 Lakeside Drive, Burbank, California 91505. SHOC and SHI, together with
their subsidiary entities, are holding companies engaged in the making,
holding and disposing of investments in various industries, principally in
the United States, Israel, Europe, Australia and New Zealand. Roy E. Disney
and his wife, Patricia A. Disney, own approximately 4.5% of the common
stock of SHI. Roy Patrick Disney, Susan Disney Loughman, Abigail Edna
Disney and Timothy J. Disney (the "Disney Children") own an aggregate of
approximately 45.4% of the common stock of SHI. In addition, Roy E. Disney
is the sole trustee of four trusts established for the benefit of the
respective Disney Children which hold an aggregate of approximately 50% of
SHI common stock.
The business address of each of the persons listed below is 4444
Lakeside Drive, Burbank, California 91505. The names and principal
occupations or employments of the directors, executive officers and
controlling persons of SHOC and SHI are as follows:
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Principal Occupation
Name Position or Employment
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Roy E. Disney Chairman of Chairman of the Board of Directors of
the Board of SHI and SHOC; Vice Chairman of the
Directors Board of Directors of the Walt
Disney Company (an international
company engaged in family
entertainment, with its principal
executive offices located at 500
South Buena Vista Drive, Burbank,
California 91521); Chairman of the
Board of Directors of Shamrock
Capital Advisors, Inc., a Delaware
corporation ("SCA") (a closely-held
corporation which provides
management and consulting services,
principally to SHOC and investment
partnerships organized by SHOC
(including businesses in which such
partnerships invest). The principal
executive office of SCA is 4444
Lakeside Drive, Burbank, CA 91505
Patricia A. Disney Vice Chairman Vice Chairman of the Board of
of the Board Directors of SHI, SHOC and SCA
of Directors
Stanley P. Gold Director and Director and President of SHI and SHOC.
President Director, President, Treasurer and
Managing Director of SCA; Director of
The Walt Disney Company
Robert G. Moskowitz Executive Vice Executive Vice President and Secretary
President and of SHI and SHOC; Managing Director and
Secretary Secretary of SCA
Gregory Martin Treasurer and Vice President, Chief Financial Officer
Assistant and Treasurer of SHOC; Treasurer and
Secretary of Assistant Secretary of SHI
SHI; Vice
President,
Chief Financial
Officer and
Treasurer of
SHOC
Eugene I. Krieger Vice Chairman Vice Chairman of the Board of
of the Board Directors of SHI
of Directors
All of the persons listed above are citizens and residents of the
United States.
(d)-(e) During the last five years, neither SHOC nor SHI nor, to SHOC's
best knowledge, any of their directors, executive officers or controlling
persons, as the case may be, has been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors) or has been a party
to a civil proceeding of a judicial or administrative body of competent
jurisdiction as a result of which such person was or is subject to a
judgment, decree or final order enjoining future violations of, or
prohibiting or mandating activities subject to, Federal or State securities
laws or finding any violation with respect to such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
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The total amount of funds used by SHOC to purchase the
Convertible Notes (as defined below in Item 4) on June 30, 2000, was $25
million. The total amount of funds used by SHOC to purchase the 100,000
Ordinary Shares it directly owns was $1,833,050 (including brokerage
commissions). All of such funds were derived from SHOC's working capital
and from margin borrowings from SHOC's trading account at Solomon Smith
Barney Inc. None of the Ordinary Shares were pledged as security for the
margin borrowings. A copy of the Margin Account Agreement between SHOC and
Solomon Smith Barney Inc. is attached hereto as Exhibit 4 and incorporated
herein by reference.
ITEM 4. PURPOSE OF TRANSACTION.
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On June 30, 2000, SHOC entered into a Convertible Note Purchase
Agreement (the "Note Purchase Agreement") with the Company providing for
the purchase by SHOC from the Company of $25 million of 7% Convertible
Notes due June 30, 2004 (the "Convertible Notes"), which notes are
convertible into Ordinary Shares of the Company, NIS 0.01 nominal value
(the "Conversion Shares"), at a per share conversion price of $23 (subject
to adjustment as set forth in the Convertible Notes).
Pursuant to the terms of the Note Purchase Agreement, as long as
(i) 35% or more of the aggregate principal of the Convertible Notes remain
outstanding and SHOC, its affiliates and permitted transferees hold at
least 50% of the aggregate principal amount of the Convertible Notes, or
(ii) SHOC, its affiliates and permitted transferees beneficially own at
least 35% of the Conversion Shares, the Company has agreed to recommend to
its shareholders, prior to any general meeting of shareholders at which
directors may be proposed to be elected, to elect a representative of SHOC
to the Company's Board of Directors. SHOC intends to nominate Michael
Geiger, an employee of a consulting firm retained by SHOC, for election to
the Company's Board of Directors as SHOC's representative. In connection
with the election of a representative of SHOC to the Company's Board of
Directors, the Company has also agreed to recommend increasing the size of
its Board of Directors from 8 to 10 members at the next Company
shareholders' meeting. In addition, if both of the tests in clauses (i) and
(ii) of the first sentence of this paragraph are not met, SHOC will have a
right to have a non-voting observer attend the meetings of the Company's
Board of Directors.
The Convertible Notes provide that any interest on the
Convertible Notes shall be paid either, at the discretion of the Board of
Directors of the Company, (i) in cash or (ii) on or prior to June 30, 2002,
by issuing additional Convertible Notes, subject to certain limitations
provided in the Convertible Notes.
The Company shall not have any right to redeem any Notes prior to
December 31, 2000. On and after such date, the Company shall have the right
to redeem all, but not less than all, of the Notes, at any time and from
time to time, at a redemption price in cash equal to 100% of the principal
thereof plus all accrued and unpaid interest thereon to the date of
redemption; provided, however, that the Company shall have no such right of
redemption unless (i) no Event of Default or Default (each as defined in
the Convertible Notes) shall have occurred and be continuing and (ii) the
Current Market Price (as defined in the Convertible Notes) is equal to at
least 175% of the conversion price of the Convertible Notes for the thirty
consecutive trading day period ending on the trading day immediately prior
to the date the notice of redemption is sent to SHOC.
SHOC shall be entitled, at its option, to require the Company to
redeem its Convertible Notes (a "Change in Control Put") at 105% of their
principal plus all accrued but unpaid interest if any person or group
(within the meaning of Rules 13d-3 and 13d-5 under the Act) acquires
beneficial ownership (as determined pursuant to Rule 13d-3 of the Act) of
more than 35% of the outstanding Ordinary Shares of the Company, whether
through new issuances, open market purchases, tender offer or otherwise.
As long as 35% or more in aggregate principal of the Convertible
Notes remain outstanding and SHOC and its affiliates and permitted
transferees own at least a majority in aggregate principal of the then
outstanding Convertible Notes, SHOC may elect to require the Company upon
completion of a merger, consolidation or a sale of assets representing 35%
or more of the Company's assets to redeem the Convertible Notes: (i) in the
case of a merger or consolidation to which the Change in Control Put is not
applicable and as to which the per share consideration to be received by
holders of Ordinary Shares does not equal or exceed the conversion price of
the Convertible Notes, to purchase all of the Convertible Notes at the
principal thereof plus all accrued but unpaid interest; and (ii) in the
case of an asset sale, to purchase that portion of the principal of the
Convertible Notes, plus all accrued but unpaid interest, in an amount not
to exceed 50% of the proceeds (net of related out-of-pocket transaction
expenses) received by or on behalf of the Company from such asset sale.
The Convertible Notes place several restrictions on the Company,
including: (i) a prohibition on the incurrence of indebtedness for borrowed
money ranking senior or pari passu to the Convertible Notes (subject to
certain exceptions set forth in the Convertible Notes); (ii) a prohibition
on the adoption of any plan of liquidation contemplating the disposition of
all or substantially all the assets of the Company unless provision is made
for the satisfaction of all obligations under the Convertible Notes; (iii)
a prohibition on the redemption or repurchase of any shares of the
Company's capital stock; (iv) a prohibition on any transactions involving
commodity options, futures contracts or similar transactions, except for
hedging transactions carried out in the ordinary course of business
consistent with past practice; and (v) a prohibition on entering into any
contract or amending any existing contract or the charter documents of the
Company if such new contract or such amendment would prevent the Company
from honoring its obligations under the Note Purchase Agreement, the
Convertible Notes or the Registration Rights Agreement (as defined in Item
6 below).
Additionally, the Convertible Notes place several restrictions on
the Company which are applicable for so long as 35% or more in aggregate
principal of the Convertible Notes remain outstanding and SHOC and its
affiliates and permitted transferees own at least a majority in aggregate
principal of the then outstanding Convertible Notes, including: (i) a
limitation on the incurrence of indebtedness for borrowed money (excluding
the Convertible Notes) in excess of $60 million (subject to certain
exceptions set forth in the Convertible Notes); (ii) a prohibition on the
payment of dividends on any shares of the Company's capital stock; (iii) a
prohibition on engaging in any business if, as a result, the general nature
of the Company's business would be substantially changed from the
e-learning and training services or VSAT satellite business in which the
Company is engaged on June 30, 2000; and (iv) a prohibition on transactions
with related parties involving $100,000 or more individually in one year or
$500,000 or more in the aggregate in any one year (subject to certain
exceptions set forth in the Convertible Notes).
The foregoing description of portions of the Note Purchase
Agreement and the Convertible Notes is not intended to be complete and is
qualified in its entirety by the complete text of the Note Purchase
Agreement and the Convertible Notes, which are incorporated herein by
reference. Copies of the Note Purchase Agreement and the form of
Convertible Note are being filed herewith as Exhibits 1 and 3,
respectively.
SHOC acquired the Convertible Notes and Ordinary Shares for
investment purposes. SHOC currently intends to transfer approximately $12.5
million in principal amount of the Convertible Notes owned by it, which
Convertible Notes are convertible into 543,478 Ordinary Shares as of the
date hereof, to an investment vehicle to be formed by an unaffiliated
foreign private entity. The transfer is contingent upon the resolution of
certain Israeli tax issues.
Notwithstanding the foregoing, SHOC may determine from time to
time in the future, based on market and general economic conditions, the
business affairs and financial condition of the Company, the availability
of securities at favorable prices and alternative investment opportunities
available to SHOC, and other factors that SHOC may deem relevant, to
acquire additional securities of the Company in the open market, in
privately negotiated transactions or otherwise, or to sell some or all of
the securities it now holds or hereafter acquires as set forth above or
otherwise.
Except as stated in this response to Item 4, SHOC has no current
plans or proposals with respect to the Company or its securities of the
types enumerated in paragraphs (a) through (j) of Item 4 to the form of
Schedule 13D promulgated under the Act.
ITEM 5. INTERESTS IN SECURITIES OF THE ISSUER.
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(a), (b) SHOC has entered into the Note Purchase Agreement for the purchase
of $25 million in Convertible Notes, convertible into 1,086,956 Ordinary
Shares, constituting approximately 8.4% of the issued and outstanding
Ordinary Shares; provided, however, that the conversion ratio of the
Convertible Notes is subject to adjustment under certain circumstances set
forth in the Convertible Notes. Upon conversion of the Convertible Notes
into Ordinary Shares, SHOC will have beneficial ownership of such Ordinary
Shares, with sole power to vote or direct the vote and sole power to
dispose or direct the vote and sole power to dispose or direct the
disposition of such Ordinary Shares.
In addition, during the last 60 days, SHOC acquired 100,000
Ordinary Shares on such dates and at such per share prices as indicated on
the Schedule of Transactions attached hereto as Exhibit 5 and incorporated
herein by reference. All such transactions were effected in the open market
on the Nasdaq National Market. SHOC possesses sole voting and dispositive
power over such Ordinary Shares. Such 100,000 Ordinary Shares, when
combined with the 1,086,956 Ordinary Shares underlying the Convertible
Notes, constitute approximately 9.2% of the issued and outstanding Ordinary
Shares of the Company.
Finally, each of the controlling persons of SHOC and SHI may be
deemed to beneficially own the Convertible Notes (and the underlying
Ordinary Shares) and the Ordinary Shares held by SHOC, pursuant to Rule
13d-3 under the Act. Those controlling persons are identified in response
to Item 2.
The percentages set forth in this response to Items 5(a) and 5(b)
assume that 11,792,238 Ordinary Shares were outstanding on June 30, 2000,
as represented by the Company on such date and also include the 1,086,956
Ordinary Shares issuable upon conversion of the Convertible Notes.
(c) Except as set forth above, neither SHOC nor, to the knowledge of
SHOC, any person identified in response to Item 2, beneficially owns any
Ordinary Shares or has effected any transactions in Ordinary Shares during
the preceding 60 days.
(d) SHOC has no knowledge of any other person that has the right to
receive or the power to direct the receipt of dividends from, or the
proceeds from the sale of, the Convertible Notes.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER.
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SHOC has no knowledge of any contracts, arrangements,
understandings or relationships (legal or otherwise) among the persons
named in response to Item 2 or between such persons and any person with
respect to any securities of the Company, other than as follows:
SHOC purchased $25 million of Convertible Notes on June 30, 2000,
pursuant to the Note Purchase Agreement, in a transaction exempt from
registration under the Securities Act of 1933, as amended. Certain
provisions of the Note Purchase Agreement and the Convertible Notes are
described above in Item 4. In addition, the Note Purchase Agreement
contains customary representations and warranties.
On June 30, 2000, SHOC entered into a Registration Rights
Agreement (the "Registration Rights Agreement") with the Company, pursuant
to which the Company granted SHOC certain registration rights with respect
to the Conversion Shares. Pursuant to the Registration Rights Agreement, at
any time after September 29, 2000, the beneficial owners (as determined
pursuant to Rule 13d-3 of the Act) of 30% or more of the Conversion Shares
(the "Initiating Holders") may request that the Company use its best
efforts to effect the registration of the Conversion Shares pursuant to the
Securities Act of 1933, as amended, provided that the aggregate price to
the public (net of any underwriters' discounts or commissions) is at least
$2,500,000. The Initiating Holders are entitled to require the Company to
effect up to one registration, subject to certain limitations set forth in
the Registration Rights Agreement. The Registration Rights Agreement also
provides SHOC with certain tag-along registration rights upon certain
public offerings by the Company. The Company will pay certain expenses of
the holders of the Conversion Shares in connection with such registrations
as provided in the Registration Rights Agreement.
Additionally, SHOC has agreed not to sell any Conversion Shares
held by SHOC for up to 45 days following the effective date of the
registration statement for certain firm commitment underwritten offerings
by the Company of Ordinary Shares in the United States if required by the
lead underwriter, subject to certain limitations set forth in the
Registration Rights Agreement.
The foregoing description of portions of the Note Purchase
Agreement, the Registration Rights Agreement and the Convertible Notes is
not intended to be complete and is qualified in is entirety by the complete
text of the Note Purchase Agreement, the Registration Rights Agreement and
the Convertible Notes, which are incorporated herein by reference. Copies
of the Note Purchase Agreement, the Registration Rights Agreement and the
form of Convertible Note are being filed herewith as Exhibits 1, 2 and 3,
respectively.
<PAGE>
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
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DOCUMENT
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Exhibit 1 -- Convertible Note Purchase Agreement between SHOC and
the Company, dated as of June 30, 2000
Exhibit 2 -- Registration Rights Agreement between SHOC and the
Company, dated as of June 30, 2000
Exhibit 3 -- Form of 7% Convertible Note
Exhibit 4 -- Margin Account Agreement between Shamrock Holdings of
California, Inc. and Solomon Smith Barney Inc.
Exhibit 5 -- Schedule of Transactions
<PAGE>
SIGNATURES
After reasonable inquiry and to the best of our knowledge and
belief, we certify that the information set forth in this statement is
true, complete and correct.
Date: July 10, 2000
SHAMROCK HOLDINGS OF CALIFORNIA, INC.
By:/s/ Robert G. Moskowitz
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Robert G. Moskowitz
Executive Vice President and Secretary
<PAGE>
EXHIBIT INDEX
DOCUMENT
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Exhibit 1 -- Convertible Note Purchase Agreement between SHOC and
the Company, dated as of June 30, 2000
Exhibit 2 -- Registration Rights Agreement between SHOC and the
Company, dated as of June 30, 2000
Exhibit 3 -- Form of 7% Convertible Note
Exhibit 4 -- Margin Account Agreement between Shamrock Holdings of
California, Inc. and Solomon Smith Barney Inc.
Exhibit 5 -- Schedule of Transactions
