Catalina Marketing Agrees to be Acquired by Hellman & Friedman for $32.50 Per Share in Cash

  
    
  
  
    
      Catalina Marketing Corporation (NYSE:POS) announced today that it has 
      entered into a definitive merger agreement to be acquired by private 
      equity firm Hellman & Friedman Capital Partners VI, L.P. and its related 
      funds in an all-cash transaction valued at $1.7 billion, including the 
      assumption of approximately $136 million of current indebtedness. 
      Hellman & Friedman will acquire by merger 100% of the outstanding equity 
      interests of the company for $32.50 per share in cash, $0.40 per share 
      higher than under the terms of the agreement signed on March 8, 2007 
      with affiliates of ValueAct Capital Master Fund L.P. (ValueAct Capital). 
      Hellman & Friedman LLC is a leading private equity investment firm with 
      offices in San Francisco, New York and London and is currently investing 
      its sixth fund, which has over $8 billion of committed capital.
    
    
      Under the terms of the merger agreement, Catalina stockholders will 
      receive $32.50 in cash for each outstanding share of stock. This 
      represents a premium of approximately 34% over the closing share price 
      on December 7, 2006, the last trading day before disclosure of the 
      initial unsolicited expression of interest from a third party private 
      equity firm with respect to the acquisition of the company. The company 
      has terminated its merger agreement with ValueAct Capital and paid the 
      $8.44 million termination fee as required by the terms of that 
      agreement. Under the terms of the merger agreement with Hellman & 
      Friedman, Catalina has agreed to pay a termination fee of $50.6 million 
      in the event it chooses to accept a competing bid prior to the vote of 
      the stockholders with regard to the Hellman & Friedman agreement.
    
    
      The company previously disclosed that it had engaged Goldman, Sachs & 
      Co. as its financial advisor and that the special committee retained 
      Lazard, to assist it in connection with its deliberations. Based on its 
      consultations with these firms, and following discussions with various 
      other potentially interested parties and other activities, the special 
      committee and the entire board of directors (with Jeffrey W. Ubben, a 
      principal of ValueAct Capital, not participating) of the company have 
      unanimously approved the merger agreement and the board of directors has 
      recommended that the company’s stockholders 
      vote in favor of the merger agreement.
    
    
      Pending the receipt of shareholder approval and expiration of the 
      waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 
      1976 and other required regulatory approvals, as well as satisfaction of 
      other customary closing conditions, the transaction is expected to be 
      completed in the third quarter of 2007. Hellman & Friedman has received 
      customary debt financing commitments from Bear Stearns and Morgan 
      Stanley.
    
    
      In connection with the Hellman & Friedman merger agreement, Frederick W. 
      Beinecke, the chairman of the board of directors of the company, and 
      Antaeus Enterprises, an affiliate of Mr. Beinecke, have entered into a 
      voting agreement with Hellman & Friedman pursuant to which Mr. Beinecke 
      and Antaeus will vote the aggregate of 2.9 million shares of common 
      stock owned by them in favor of the transaction. It is noted also that 
      ValueAct has previously signed an agreement with the company pursuant to 
      which ValueAct will vote the 7.2 million shares owned by it in favor of 
      the transaction with Hellman & Friedman.
    
    
      “We are pleased that we were able to negotiate 
      additional value for our shareholders during the period following the 
      signing of the ValueAct agreement. Our management remained focused on 
      the business while simultaneously doing an excellent job in working with 
      a variety of potential alternative purchasers. The additional 
      consideration available to our shareholders is a direct result of their 
      efforts and the process guided by our outside advisors,” 
      said Frederick W. Beinecke, chairman of the special committee and of the 
      board of directors. “Hellman & Friedman, which 
      is a leading private equity firm, has recognized the value of our 
      company.”
    
    
      “We believe Catalina Marketing is a uniquely 
      positioned full-service media and marketing services company,” 
      said Andrew Ballard, Managing Director of Hellman & Friedman LLC. “Its 
      businesses provide customers with innovative products and it generates 
      strong cash flows, and has a world-class management team. We look 
      forward to partnering with Catalina to serve its current and future 
      customers and to achieve its long-term business goals.”
    
    
      “Hellman & Friedman will be an excellent 
      partner for Catalina. They are knowledgeable professionals that 
      understand our business, and importantly, support our long term growth 
      strategy to serve our customers with our unique and superior marketing 
      solutions,” said Dick Buell, chief executive 
      officer. “Hellman & Friedman and our entire 
      management team are committed to continue building our business beyond 
      its existing foundation to deliver additional opportunities for our 
      customers and our employees. We look forward to working with Hellman & 
      Friedman as the company moves into its next phase of growth and 
      development.”
    
    
      The company also announced that it has amended the terms of its 
      Stockholder Protection Agreement, initially entered into on May 8, 1997, 
      to exempt the transaction with Hellman & Friedman from the effects of 
      such agreement, increase the exercise price associated with the 
      agreement from $40 to $90 and extend the final expiration date of the 
      Stockholder Protection Agreement from April 22, 2007 until the earlier 
      of the effective date of the transaction with Hellman & Friedman or 
      April 22, 2008.
    
    
      About Catalina Marketing Corporation
    
    
      Based in St. Petersburg, FL, Catalina Marketing Corporation (www.catalinamarketing.com) 
      was founded over 20 years ago based on the premise that targeting 
      communications based on actual purchase behavior would generate more 
      effective consumer response. Today, Catalina Marketing combines 
      unparalleled insight into consumer behavior with dynamic consumer 
      access. This combination of insight and access provides marketers with 
      the ability to execute behavior-based marketing programs, ensuring that 
      the right consumer receives the right message at exactly the right time. 
      Catalina Marketing offers an array of behavior-based promotional 
      messaging, loyalty programs and direct-to-patient information. 
      Personally identifiable data that may be collected from the company's 
      targeted marketing programs, as well as its research programs, are never 
      sold or provided to any outside party without the express permission of 
      the consumer.
    
    
      About Hellman & Friedman LLC
    
    
      Hellman & Friedman LLC is a leading private equity investment firm with 
      offices in San Francisco, New York and London. The Firm focuses on 
      investing in superior business franchises and serving as a value-added 
      partner to management in select industries including media and marketing 
      services, financial services, professional services, asset management, 
      software and information services, and energy. Since its founding in 
      1984, the Firm has raised and, through its affiliated funds, managed 
      over $16 billion of committed capital and is currently investing its 
      sixth partnership, Hellman & Friedman Capital Partners VI L.P., with 
      over $8 billion of committed capital. Representative investments 
      include: DoubleClick, Young & Rubicam, Digitas Inc, The Nielson Company, 
      Axel Springer AG, ProSiebenSat1, The Nasdaq Stock Market, Intergraph 
      Corporation, Vertafore, Inc., and Texas Genco LLC.
    
    
      About the Transaction
    
    
      In connection with the proposed merger, Catalina Marketing Corporation 
      will file a proxy statement with the Securities and Exchange Commission. 
      INVESTORS AND SECURITY HOLDERS ARE STRONGLY ADVISED TO READ THE PROXY 
      STATEMENT WHEN IT BECOMES AVAILABLE, BECAUSE IT WILL CONTAIN IMPORTANT 
      INFORMATION. Investors and security holders may obtain a free copy of 
      the proxy statement (when available) and other documents filed by 
      Catalina Marketing Corporation at the Securities and Exchange 
      Commission's Web site at http://www.sec.gov. 
      The proxy statement and such other documents may also be obtained for 
      free by directing such request to Catalina Marketing Corporation, 
      Investor Relations, 200 Carillon Parkway, St. Petersburg, FL 33716, 
      telephone: [phone] or on the company's website at http://phx.corporate-ir.net/phoenix.zhtml?c=72727&p=irol-IRHome.
    
    
      Catalina Marketing and its directors, executive officers and certain 
      other members of its management and employees may be deemed to be 
      participants in the solicitation of proxies from its stockholders in 
      connection with the proposed merger. Information regarding the interests 
      Catalina’s participants in the solicitation 
      will be included in the proxy statement relating to the proposed merger 
      when it becomes available.
    
    
      Certain statements in the preceding paragraphs are forward-looking, 
      and actual results may differ materially. Statements not based on 
      historic facts involve risks and uncertainties, including, but not 
      limited to, the occurrence of any event, change or other circumstances 
      that could give rise to the termination of the merger agreement with 
      Hellman & Friedman, the outcome of any legal proceedings that may be 
      instituted against the Company related to the merger agreement; the 
      inability to complete the merger due to the failure to obtain 
      stockholder approval for the merger or the failure to satisfy other 
      conditions to completion of the merger; risks that the proposed 
      transaction diverts management or disrupts current plans and operations 
      and any potential difficulties in employee retention as a result of the 
      merger and the impact of the substantial indebtedness to be 
      incurred to finance the consummation of the merger,