Atari & JTS to Merge
Newsbytes, February 14, 1996

SUNNYVALE, CALIFORNIA, U.S.A., 1996 FEB 14 (NB) -- Atari Corp. (AMEX:ATC) and JTS Corporation have agreed to merge the two companies. Atari is the pioneer in multimedia video gaming and JTS is a manufacturer of computer disk drives.

Under the terms of the agreement, the new corporation will operate under the name of JTS Corporation and the officers of JTS will become the officers of the merged company. The Atari entertainment business and the JTS disk drive business will operate as separate divisions.

Atari has extended a bridge loan to JTS in the amount of $25 million. In the event that the merger is not finalized, the bridge loan will be convertible into shares of Preferred Stock at the option of Atari or JTS and subject to "certain conditions."

As a result of the transaction, Atari stockholders will hold approximately 60 percent of the outstanding shares of the new company following the merger. The transaction is structured to qualify as a tax-free reorganization.

Virginia Walker, chief financial officer for JTS, told Newsbytes, "Contrary to rumors, we do not expect to sell the video game division. It is true, that by naming the new company JTS, and putting the JTS management team in charge, we are announcing that the disk drive manufacturing is expected to be the fastest growing section of the new company."

The board of directors of Atari and JTS have approved the definitive agreement. The merger is subject to "certain shareholder and regulatory approvals" and "other conditions" to closing. The parties anticipate the transaction will close toward the end of the second calendar quarter of 1996.

JTS was formed in 1994 by Jugi Tandon, the company's current chairman of the board. He will keep that position in the new company. Tom Mitchell, president and chief executive officer of JTS, was a cofounder of Seagate Technology and president and chief operations officer of both Seagate and Conner Peripherals. He will continue as president and chief executive officer with the new company.

Founded in 1994, JTS Corporation develops and manufactures hard disk drives for the computer industry. JTS has recently introduced its new three-inch Nordic product for the portable computer market. Headquartered in San Jose, California, with manufacturing facilities in Madras, India, JTS employees 1,300 people worldwide.