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Reader's Digest Association Sold in $2.4 billion deal

Friday, November 17, 2006

Press release from the issuing company

Nov. 16 -- The Reader's Digest Association, Inc. announced today that it has entered into a definitive merger agreement under which an investor group led by Ripplewood Holdings LLC will acquire all of the outstanding common shares of RDA for $17.00 per share in a transaction valued at $2.4 billion, including assumption of debt. The Board of Directors of RDA has approved the merger agreement and recommended to the holders of RDA common stock that they adopt the merger agreement. Under the terms of the agreement, RDA's common shareholders will receive $17.00 in cash for each share of RDA common stock they hold. This represents a premium of approximately 25% over RDA's volume-weighted average price over the past 60 trading days. The transaction is expected to close during the first quarter of calendar year 2007, and is subject to the funding of the investor group's committed financing and the approval of the holders of a majority of the outstanding shares of RDA common stock, as well as other customary closing conditions, including antitrust clearance. Goldman, Sachs & Co. and Michael R. Lynch served as financial advisors, and Jones Day and Richards Layton & Finger P.A. served as legal advisors, to RDA in connection with its review of strategic alternatives and with this transaction. Morgan Stanley & Co. Incorporated, J.P. Morgan Securities Inc., Citigroup and Merrill Lynch served as financial advisors, and Cravath, Swaine & Moore LLP served as legal advisor, to the investor group. About The READER'S DIGEST ASSOCIATION, Inc. The Reader's Digest Association, Inc. is a global publisher and direct marketer of products that inform, enrich, entertain and inspire people of all ages and cultures around the world. RDA had revenues of $2.4 billion for the fiscal year ended June 30, 2006. RDA's corporate web site is http://www.rda.com. About RIPPLEWOOD HOLDINGS LLC Based in New York, Ripplewood Holdings LLC is a leading private equity firm established in 1995 by Timothy C. Collins. Through five institutional private equity funds managed by Ripplewood, the firm has invested over $3 billion in transactions in the U.S., Asia, Europe and the Middle East.

 

 

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