Vector's Offer Remains in the Best Interest of Technicolor and its Shareholders

  Vector's Offer Remains in the Best Interest of Technicolor and its
  Shareholders

Business Wire

SAN FRANCISCO -- June 12, 2012

Vector Capital, a leading global technology investment firm, submitted a
binding offer to Technicolor on May 25, 2012 that is clearly superior for
Technicolor and its shareholders to the transaction with JP Morgan and One
Equity Partners (the “JPMorgan Transaction”). Vector Capital would like to
provide some additional information about the current situation and the Vector
Capital Offer.

1.Update following Technicolor Press Release dated June 10, 2012 followed by
JPMorgan Press Release dated June 12, 2012 – Amendment Proposal to JPMorgan
Transaction Rejected By The Board Of Technicolor

On June 8^th, JPMorgan and One Equity Partners through their investment
vehicle Jesper Cooperatief U.A. ("Jesper"), submitted a proposed amendment to
the contracts entered into between the two parties on May 2, 2012. The amended
proposal included the following terms:

  *An increase in the price of the reserved capital increase from EUR 1.60 to
    EUR 1.90
  *A new provision setting forth a break-up fee of €3.4 million
  *A new condition making the JPMorgan Resolutions subject to no resolution
    having an equivalent object (including the Vector Resolutions, as amended,
    as the case may be) being put to the vote of the General Shareholders'
    Meeting

While the amended JPMorgan offer is only a proposal, we thought it would be
helpful to clarify why it is neither economically superior nor in the best
interests of shareholders. This amended proposal merely matches the Vector
offer in terms of pricing but not in terms of structure and balance between
reserved capital increase and rights offering. Even following this amended
proposal the Vector offer remains superior for the following reasons:

  *The amended proposal from JPMorgan would result in fewer proceeds for the
    company a maximum of €179.3 million compared to a maximum of €186.4
    million under the Vector Offer
  *The amended proposal from JPMorgan would result in more dilution to
    existing shareholders compared to the Vector Offer. Under the Vector
    offer, shareholders can subscribe to a substantially larger rights
    offering at a price of EUR 1.56, representing a significant discount to
    current market price. In the JPMorgan Proposal, existing shareholders are
    entitled to subscribe to 20.3 million shares while in the Vector Offer,
    existing shareholders are entitled to subscribe to 50.5 million shares
  *As a result, the difference in average price received by Technicolor as
    expressed in the JPMorgan press release simply reflects the higher
    proportion of shares offered through the rights offering in the Vector
    offer – something that is extremely beneficial to existing Technicolor
    shareholders
  *The breakup fee in JPMorgan’s proposal may have the effect of limiting
    competition and preventing the company from achieving the best outcome for
    shareholders

The board of Technicolor rejected this proposal.

The company highlighted the obligation under French law to put to the vote of
the General Shareholders' Meeting the Vector resolutions or any amendment
presented by a shareholder at such shareholders' meeting. Vector wishes to
highlight that it is essential that shareholders, in accordance with French
law and in the utmost interest of such shareholders, not only be given the
opportunity (as it is indicated in the JPMorgan press release) to review all
proposals that would be submitted to them at the Technicolor shareholders'
meeting, but also that the company ensures that shareholders be entitled to
exercise their essential right to vote among all draft resolutions that will
be presented at that shareholders' meeting (including any potential amendment
thereto proposed by a shareholder).

2.Vector Capital’s Offer Continues to Offer Superior Financial and Strategic
Value for Technicolor and its shareholders as compared to the existing
JPMorgan Transaction

  *Petalite (the investment vehicle owned by Vector Capital) would subscribe
    to a reserved capital increase at a price of €1.90 per share, a 19%
    premium compared to the JPMorgan Transaction of €1.60 per share
  *Vector Capital’s proposal represents a weighted average price of €1.71 to
    €1.73 per share issued, an approximately 8% premium to the JPMorgan
    Transaction of €1.59 per share issued, assuming 0 to 100% shareholder
    subscription to the rights offering
  *Vector Capital’s proposal includes a smaller reserved capital increase and
    a larger rights offering, which lowers the dilution to Technicolor’s
    current shareholders by 28.3%
  *Vector Capital’s proposal allows existing shareholders to subscribe to
    more than twice the number of shares than the JP Morgan Transaction.
    Vector Capital has designed the balance between the reserved capital
    increase and rights offering specifically to reduce the dilution of
    existing shareholders
  *With total proceeds of up to €186.4 million, Vector Capital’s offer would
    result in €28.7 million more proceeds to Technicolor (18.2% higher) than
    the JPMorgan Transaction
  *Vector Capital is a pure technology investment firm with 15 years of
    experience investing in the technology and digital media markets. Vector
    Capital has a highly focused investment strategy that emphasizes
    technology companies with a high degree of intellectual property that are
    in a state of transformation. Since inception in 1997, Vector Capital has
    made more than 35 investments in public and private companies with an
    aggregate value of more than $2.5 billion, across sectors including
    digital media, infrastructure software, and internet services
  *Vector Capital would be a committed and stable long-term partner. Over the
    past months, Vector Capital has had extensive discussions with Technicolor
    management and we are convinced we can assist Technicolor in the execution
    of its strategy. After strengthening the Company’s balance sheet and
    helping it pay down debt, Vector Capital would be fully supportive of
    Technicolor's management in the implementation of the ‘Amplify 2015’
    strategic roadmap and the Company's focus on technology leadership
  *Vector Capital’s offer is recommended by ISS, Glass Lewis and ProxInvest,
    and is independently recognized as a superior offer to the JPMorgan
    Transaction.

Vector recommends that Technicolor shareholders attend the shareholder meeting
in person or through a proxy.

Appendix 1:Comparison Between the two Draft Resolutions Submitted for
Shareholder Vote at the AGM:

                                                      
                           JPMorgan                 Vector
                           Proposed          Proposed          Delta
                           Investment               Investment
                   Reserved capital increase
Size of
reserved
capital             24.4%             17.5%             -28.3%
increase and
shareholder
dilution
Number of
shares              72.3 m            47.5 m            -34.3%
issued
Subscription
price (in           1.60              1.90              +18.8%
Euros)
Proceeds to
Technicolor         €115.6 m          €90.2 m           -22.0%
(in Euros)
                   Rights issue
Size of
rights issue                                                  
assuming:
- a 75%                    6.4%                     14.6%
backstop
- a 100%
subscription        8.3%              18.5%             
by all
shareholders
Number of
shares
issued
pursuant to
rights issue
assuming:
- a 75%                    20.2 m                   46.2 m                   +129%
backstop
- a 100%
subscription        26.9 m            61.6 m            +129%
by all
shareholders
Subscription
price (in           1.56              1.56              0%
Euros)
Proceeds to
Technicolor
(in Euros)
assuming:
- a 75%                    €31.5 m                  €72.1 m                  +129%
backstop
- a 100%
subscription        €42.0 m           €96.2 m           +129%
by all
shareholders
                   Final outcome
                           (following reserved capital increase and rights issue)
% of share
capital of
the relevant
investor,
assuming:
- a 75%
rights issue               29.42 %                  29.94%
backstop
- a 100%
subscription        24.42 %           18.00%            
by all
shareholders
Average
Price per
Share
Received by
Technicolor,
assuming:
- a 75%
rights issue               €1.59                    €1.73                    +8.9%
backstop
- a 100%
subscription        €1.59             €1.71             +7.5%
by all
shareholders
Total
proceeds to
Technicolor
(in Euros)
assuming:
- a 75%
rights issue               €147.1 m                 €162.3 m                 +10.3%
backstop
- a 100%
subscription        €157.6 m          €186.4 m          +18.2%
by all
shareholders


^1 For the avoidance of doubt, this excludes the current shareholding of
JPMorgan in Technicolor.

About Vector Capital

Vector Capital is a leading global private equity firm located in San
Francisco specializing in the technology sector. Founded in 1997, Vector
Capital manages over $2 billion in equity capital from a variety of investors,
including the world’s most respected university endowments, foundations,
financial institutions, and family offices. Vector Capital has a highly
focused investment strategy that emphasizes technology companies with a high
degree of intellectual property that are in a state of transformation. Since
inception, Vector Capital has made more than 35 investments in public and
private companies with an aggregate value of more than $2.5 billion, across
sectors including digital media, infrastructure software, and internet
services.

Contact:

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or
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or
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pierre.tattevin@lazard.fr
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msb@georgeson.com
or
Christine Genin, +44 20 70 19 70 06 / +44 77 88 20 44 61
Christine.genin@georgeson.com
or
Vector Capital:
Christen Chesel, +1 415-293-5007
cchesel@vectorcapital.com