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READ-RITE CORPORATION
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PRESS RELEASE
CONTACTS: Steve Poleyn Andrea Bergofin
Jerry Parrott Todd Fogarty
Read-Rite Corporation Kekst and Company
408-956-2217 212-593-2655
FOR IMMEDIATE RELEASE
READ-RITE BOARD UNANIMOUSLY REJECTS APPLIED MAGNETICS'
UNSOLICITED PROPOSAL
MILPITAS, CA -- March 3, 1997 -- Read-Rite Corporation (NASDAQ: RDRT)
announced today that its Board of Directors has voted unanimously to reject the
unsolicited acquisition proposal by Applied Magnetics Corporation. The Board
has concluded that remaining an independent company offers the best opportunity
for Read-Rite's shareholders, employees and customers to capitalize on
Read-Rite's market leadership, technology and future prospects.
"Read-Rite's independence has been critical to its success to date,
and we are confident that adherence to our existing, long-term strategic
business plan will enable us to deliver further value to our shareholders,
employees, customers, suppliers, and the company's other constituencies in the
future. For this fundamental reason, Read-Rite's Board of Directors has
rejected Applied Magnetics' unsolicited proposal," said Cyril J. Yansouni,
chairman and chief executive officer.
"Read-Rite today is the world's largest independent supplier of
recording heads for the rapidly growing mass storage industry, and is the
volume leader among independent manufacturers in advanced inductive disk-drive
heads," continued Mr. Yansouni. "Our magnetoresistive technology is being well
received by our customers, and we are aggressively scaling up production of
magnetoresistive heads to meet our customers' demand for this next-generation
technology. By virtue of the critical mass we have achieved in production and
our commitment to fulfilling our customers' future needs by developing new
technologies, Read-Rite is well positioned as the market for disk-drive heads
evolves."
Read-Rite said it has retained Goldman, Sachs & Co. as its independent
financial advisor and to provide counsel to the Board in connection with this
matter.
Read-Rite Corporation is the world's leading independent manufacturer
of recording heads, head gimbal assemblies (HGAs) and head stack assemblies
(HSAs) for disk drives and magnetoresistive heads for quarter-inch-cartridge
tape drives. The company is headquartered in Milpitas, California and has
operations in Thailand, Malaysia, the Philippines and Singapore. Read-Rite
also has a strong presence in Japan through Read-Rite SMI Corporation, its
joint venture with Sumitomo Metal Industries, Ltd. Read-Rite employs some
20,000 people. The company's home page on the World Wide Web can be reached at
www.readrite.com.
This news release contains forward-looking information within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Act of 1934, as amended, and is subject to the "safe
harbor" created by those sections. The company's actual results for future
periods could differ materially from those projected in such forward-looking
information. Factors that could cause actual results to differ include, but
are not limited to, the following: the company's ability to ramp-up volume
production quickly and cost-effectively on its new advanced inductive and
magnetoresistive products; design-ins and qualifications for additional
products may not occur or could be slower than anticipated; demand for the
company's products could weaken and lead to order cancellations or reschedules;
and the company's ability to achieve and maintain satisfactory yields on its
new and current products.
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