Filed by Gilat Satellite Networks Ltd.
Pursuant to Rule 425 under the securities Act of
1933 and deemed filed pursuant to Rules 13e-4
and 14d-1 under the Securities Exchange Act of 1934
Subject Company: rStar Corporation
Commission File No. 000-27029
On August 5, 2002, Gilat Satellite Networks Ltd. and rStar Corporation issued
the following joint press release:
FOR IMMEDIATE RELEASE
August 5, 2002
RSTAR CORPORATION AND GILAT SATELLITE NETWORKS LTD.
ANNOUNCE EXPIRATION OF EXCHANGE OFFER
AND CLOSING OF RSTAR'S ACQUISITION OF
THE STARBAND LATIN AMERICA BUSINESS
SAN RAMON, CALIFORNIA, AND PETAH TIKVA, ISRAEL, AUGUST 5, 2002 - rStar
Corporation (Nasdaq: RSTRC) and Gilat Satellite Networks Ltd. (Nasdaq: GILTF), a
worldwide leader in satellite networking technology, announced today that the
exchange offer for up to 6,315,789 shares of rStar common stock expired at 12:00
midnight, New York City time, on Friday, August 2, 2002. In addition,
immediately prior to the expiration of the exchange offer, rStar closed its
previously announced acquisition of the StarBand Latin America business from
Gilat.
Approximately 18,935,838 shares of rStar common stock had been tendered in the
exchange offer as of 12:00 midnight, New York City time, on Friday, August 2,
2002. Because more than 6,315,789 shares of rStar common stock have been
tendered in the exchange offer, the proration provisions described in the Offer
to Exchange/Prospectus dated June 25, 2002 will apply. As explained in the Offer
to Exchange/Prospectus, because of the difficulty in determining the number of
shares of rStar common stock validly tendered and not withdrawn, rStar and Gilat
do not expect to announce the final proration factor or exchange any shares
validly tendered until about ten Nasdaq trading days after the expiration date.
After August 7, 2002, stockholders may obtain preliminary information about the
proration factor from the information agent for the exchange offer, Georgeson
Shareholder, at their toll-free number (866) 821-0667, or from their brokers.
The amount of the consideration to be paid for each share of rStar common stock
accepted for exchange will be $1.58 in cash, based upon the formula described in
the Offer to Exchange/Prospectus, and 0.0738 of a Gilat ordinary share.
Effective on August 2, 2002, the previously announced acquisition by rStar of
the StarBand Latin America business from Gilat in exchange for 43,103,448 shares
of rStar common stock was consummated. At the Annual Meeting of rStar
stockholders, held on April 30, 2002, rStar stockholders approved the
acquisition of the StarBand Latin America business. In accordance with the terms
of the acquisition agreement between Gilat and rStar, while regulatory approvals
required for the transfer of certain of the Latin American operations are
pending, Gilat will provide rStar with the economic benefit of such operations
until such time as the regulatory approvals have been obtained.
The StarBand Latin America business currently operates satellite-based rural
telephony networks in certain Latin American countries, as well as high-speed
consumer Internet access pilot networks in certain other countries. StarBand
Latin America expects to work on a wholesale basis with Latin American ISPs,
PTTs and other providers to offer high-speed Internet access via satellite. Its
target customer will be the small office/home office and select consumer market
segment in Latin America.
Effective upon the closing of rStar's acquisition of the StarBand Latin America
business, the members of the Board of Directors elected at the April 30, 2002
meeting of rStar stockholders took office. In addition, as described in the
Offer to Exchange/Prospectus dated June 25, 2002 and rStar's Proxy Statement for
the April 30, 2002 Annual Meeting of its stockholders, effective with the
closing of the acquisition, the previously announced resignation of Lance
Mortensen as Chairman and CEO of rStar became effective. It is anticipated that
Mr. Giora Oron will be appointed as the interim CEO of rStar.
ABOUT GILAT SATELLITE NETWORKS LTD.
Gilat Satellite Networks Ltd., with its global subsidiaries Spacenet Inc. and
Gilat Latin America, is a leading provider of telecommunications solutions based
on Very Small Aperture Terminal (VSAT) satellite network technology - with
nearly 400,000 VSATs shipped worldwide. Gilat markets the Skystar Advantage,
DialAw@y IP, FaraWay, Skystar 360E and SkyBlaster* 360 VSAT products in more
than 70 countries around the world. The Company provides satellite-based,
end-to-end enterprise networking and rural telephony solutions to customers
across six continents, and markets interactive broadband data services. The
Company is a joint venture partner in SATLYNX, a provider of two-way satellite
broadband services in Europe, with SES GLOBAL and, following the execution of a
definitive agreement and regulatory approval, Alcatel Space and SkyBridge,
subsidiaries of Alcatel. Skystar Advantage(R), DialAw@y IP(TM) and FaraWay(TM)
are trademarks or registered trademarks of Gilat Satellite Networks Ltd. or its
subsidiaries. Visit Gilat at WWW.GILAT.COM. (*SkyBlaster is marketed in the
United States by StarBand Communications Inc. under its own brand name.)
ABOUT RSTAR CORPORATION
rStar (Nasdaq: RSTRC) through its r)Star Broadband Networks, Inc. subsidiary,
develops, provides and manages satellite-based networks for large-scale
deployment across corporate enterprises and user communities of interest.
rStar's core products include remote high-speed Internet access, data delivery,
high-quality video and networking services distributed through its satellite
broadband Internet gateway and bi-directional solutions. rStar's technology
assures instantaneous, consistent, secure and reliable delivery of content
within the rStar network. rStar is located in San Ramon, California, and can be
reached at 925-543-0300 or at WWW.RSTAR.COM on the Web
IMPORTANT LEGAL INFORMATION
This announcement is neither an offer to purchase shares nor a solicitation of
an offer to sell securities. Also, this announcement is not a recommendation
with respect to the exchange offer. Gilat has filed a post-effective amendment
to its registration statement, of which the Offer to Exchange dated June 25,
2002 is a part, and rStar and Gilat have also filed a tender offer statement
regarding the exchange offer. The post-effective amendment to the registration
statement and tender offer statement were originally filed with the U.S.
Securities and Exchange Commission on June 25, 2002 and February 14, 2002,
respectively. We advise all security holders to read the post-effective
amendment to the registration statement and the tender offer statement, as well
as the amendments to each of these filings, because they contain important
information. You can obtain the Gilat post-effective amendment to the
registration statement, of which the Offer to Exchange is a part, the rStar and
Gilat tender offer statement, and other filed documents for free at the
Securities and Exchange Commission's website (www.sec.gov). You can also obtain
such documents for free from rStar or Gilat.
Certain statements made herein that are not historical are forward-looking
within the meaning of the Private Securities Litigation Reform Act of 1995. The
words "estimate", "project", "intend", "expect", "believe" and similar
expressions are intended to identify forward-looking statements. These
forward-looking statements involve known and unknown risks and uncertainties.
Many factors could cause the actual results, performance or achievements of
rStar and Gilat to be materially different from any future results, performance
or achievements that may be expressed or implied by such forward-looking
statements, including, among others, changes in general economic and business
conditions. For additional information regarding these and other risks and
uncertainties associated with rStar and Gilat's business, reference is made to
rStar's and Gilat's reports filed from time to time with the Securities and
Exchange Commission
The safe-harbor provided by the Private Securities Litigation Reform Act of 1995
is not available to forward-looking statements made in the context of the
exchange offer for rStar shares.
FOR FURTHER INFORMATION:
GILAT COMPANY CONTACT:
Tim Perrott
Vice President, Investor Relations
Gilat Satellite Networks
McLean, Virginia
703-848-1515
Tim.Perrott@spacenet.com
GILAT INVESTOR RELATIONS CONTACT:
Ruder Finn, Inc.
Magda Gagliano
212-593-6319
gaglianom@ruderfinn.com
RSTAR CORPORATION CONTACT:
Juleen Murray
925-543-9239
RSTAR INVESTOR RELATIONS CONTACT:
Pondel/Wilkinson Group, Los Angeles (Investor Relations)
Cecilia A. Wilkinson/Julie MacMedan
310-207-9300
investor@pondel.com