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Electronics Production | February 24, 2011

Zoran reacts to Ramius claim

Zoran responded to Ramius' claim that the previously announced transaction with CSR plc "may undervalue Zoran," and its question as to whether the transaction "was the result of a full and fair sale process to maximize value for all Zoran shareholders."
As previously announced, Zoran has entered into a merger agreement under which Zoran will merge with CSR plc. Under the terms of the Merger Agreement, it is proposed that Zoran stockholders will receive 1.85 ordinary shares of CSR, in the form of American Depositary Shares, for each share of Zoran common stock held, representing a value of USD 13.03 per share of Zoran common stock as at close on February 18, 2011.

The implied offer price represented a premium of approximately 39.9% to the closing price of each share of Zoran common stock of USD 9.32 on February 18, 2011, the last Business Day before this announcement; a premium of approximately 44.0% to the average closing price of shares of Zoran common stock over the past twelve months; and a premium of approximately 89% to the enterprise value of Zoran net of cash as of February 18, 2011. In addition, CSR has announced that it intends to return up to USD 240 million to shareholders via a share buyback program.

Events leading up the announcement are as follows:

* In early 2010, CSR and Zoran began discussions regarding a strategic combination.

* CSR indicated that they were prepared to make a formal indication of interest in the early part of November 2010.

* Because of the demands of closing the Microtune transaction, Zoran requested that CSR not make any formal proposal regarding a possible combination until after Zoran closed the acquisition of Microtune.

* On November 30, 2010, the Microtune acquisition closed.

* On December 1, 2010, Zoran received a formal indication of interest from CSR for a stock-for-stock business combination whereby Zoran stockholders would receive 35% ownership in the combined company.

* Zoran's Board hired Goldman Sachs & Co. and authorized management and Goldman Sachs & Co. to review, in the context of the CSR offer, the practical universe of cash and stock buyers for Zoran.

* The Board authorized Goldman Sachs & Co. to contact the most likely possible cash buyers. The Board also determined that no stock buyer offered a better strategic fit or greater stockholder value than CSR.

* Over the course of approximately six weeks, Goldman Sachs & Co. contacted seven cash buyers about a possible acquisition of Zoran.

* After the completion of its process, the Board ultimately determined that the CSR offer was the most compelling alternative for Zoran stockholders.

"Our primary goal was to maximize value for our stockholders," said Dr. Levy Gerzberg, president and chief executive officer of Zoran. "We are disappointed that Ramius continues to engage in its disruptive and counterproductive campaign to replace all of Zoran's independent directors. The CSR transaction delivers a significant premium to our stockholders, who should also benefit from the upside of being owners of an even stronger company."

In unanimously approving the transaction with CSR, Zoran's Board took into account a variety of factors which will be described in the Company's forthcoming proxy statement.

Stockholders are encouraged to read Zoran's proxy materials, which will be filed with the Securities and Exchange Commission in due course, for further details regarding the Board's process for considering, and the reasons for approving, the merger agreement with CSR.

Completion is expected in the second quarter of 2011 and is subject to CSR and Zoran stockholder and regulatory approvals and other customary closing conditions.

Zoran stockholders are urged to reject the Ramius Group's efforts to take control of the Board and the Company by not signing the Ramius Group's white consent card or revoking consent by signing, dating and mailing Zoran's BLUE Consent Revocation Card immediately.

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