The PROWLER News :JTS


Copyright 1996 Reuters, Limited
February 13, 1996, Tuesday, BC cycle
SECTION: Financial Report.
LENGTH: 686 words
HEADLINE: FULL TEXT- ATARI  TO MERGE WITH JTS CORP
DATELINE: SUNNYVALE, CALIF., FEB 13

Atari Corp said Tuesday it agreed to merge with JTS Corp.
This is the full text of the announcement.

SUNNYVALE, Calif.--(BUSINESS WIRE)--Feb. 13, 1996--Atari Corporation (AMEX:
ATC) and JTS Corporation today agreed to merge the two companies.  Atari is
the pioneer in multimedia video entertainment and JTS is a manufacturer of
computer disk drives.

    "This merger puts us in a great position to capitalize on a very
experienced management team and a rapidly growing disk drive market.  JTS is
using innovative technology, particularly in the 3" disk drive market, and
we are excited about its prospects," said Jack Tramiel, chairman of Atari.

    "Our partnership gives us the ability to expand our capabilities and
pursue new opportunities," said Tom Mitchell, president and chief executive
officer of JTS.  "Dataquest has predicted that 115 million disk drive units
will be shipped worldwide in 1996, and it is a great time for us to be
participating in this market," said Mitchell.

Terms of the Agreement

    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 of the new merged company.

    Atari has extended a bridge loan to JTS in the amount of $ 25,000,000.
In the event that the merger is not consummated, the bridge loan will be
convertible into shares of JTS Series A 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% of the outstanding shares of the new company following the
merger.  The transaction is structured to qualify as a tax-free
reorganization and will be accounted for as a purchase.

    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 Management Team

    JTS was formed in 1994 by Jugi Tandon, the company's current chairman of
the board.  Tandon is well-known in the computer storage industry for his
ability to develop innovative products for the marketplace.  Tandon will
remain chairman of the board of the new company.

    Tom Mitchell was a cofounder of Seagate Technology and president and
chief operations officer of both Seagate and Conner Peripherals. Mitchell
brings unparalleled industry and operational experience in the high-volume
disk drive market.  He is a pioneer in disk drive manufacturing in
Singapore, Thailand, China and India.

About Atari Corporation

    For more than twenty years, Atari has provided consumers with
high-quality, value-priced entertainment.  Atari markets Jaguar, the only
American-made, advanced 64-bit entertainment system and licenses and markets
software in the multi-platform, multimedia market.  Atari is located in
Sunnyvale, California.

About JTS Corporation

    Founded in 1994, JTS Corporation develops and manufactures hard disk
drives for the computer industry.  JTS has recently introduced its new 3"
Nordic product for the portable computer market. Headquartered in San Jose,
California, with manufacturing facilities in Madras, India, JTS employes
1,300 people worldwide.

    The above statements regarding the disk drive industry and JTS'
prospects are forward looking statements and involve a number of risks and
uncertainties. Among the factors that would cause actual results to differ
materially are the following: business conditions and growth in the portable
computer industry and in the general economy; competitive factors, including
pricing pressures; availability of components from third parties; risks
associated with manufacturing of products in India or other overseas
jurisdictions and risks associated with JTS' ability to ramp its
manufacturing operations, including cost and yield issues.

LANGUAGE: ENGLISH LOAD-DATE: February 14, 1996




PROWLER The Atari Console Disk Magazine February 27, 1996

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