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9 Mar 2007

Major Shareholder Hedge Fund Buys Company

ValueAct Capital Management, a group of hedge funds based in San Fransisco, announced yesterday that they have agreed to buy Catalina Marketing Corp at $1.7 billion in cash or $32.10 a share, a 7.5% premium over the company's closing price of $29.85.

The hedge fund group also agreed to assume $135-million in debt from the St. Petersburg company known for its printers that dispense coupons and color ads in store checkout counters. ValueAct is also Catalina's biggest shareholder.

ValueAct is known for its activist slant and their strategy is to buy large stakes in undervalued companies and then work with the management to boost performance. Founded in 2000, the hedge fund manages some $1.5 billion on behalf of institutional and wealthy individual investors.

Dick Buell, chief executive officer of Catalina said that going private will allow the company to invest aggressively and grow with long-term goals, without the fear of Wall Street backlash.

The company said it expects the deal to close in the next several months, subject to approval by stockholders. Catalina joins a growing trend of public companies looking to go private.

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