PTMK Pathmark Stores (MM)

Pathmark Stores, Inc. (Nasdaq:PTMK) announced that its stockholders approved The Yucaipa Companies LLC $150 million investment in Pathmark at a Special Meeting of Stockholders held here today. Of the 21.9 million shares voted, over 83% voted in favor of the proposal. The transaction is expected to close shortly. Eileen Scott, Chief Executive Officer of Pathmark said, "We are pleased with the support shown by our stockholders for the agreement with Yucaipa. With the new investment and Yucaipa's industry expertise, Pathmark will be in a strong position to pursue opportunities to create meaningful value for stockholders and better serve our customers. We are energized and confident as we move forward to realize the great potential of this partnership." "The results from today's meeting show that Pathmark stockholders clearly recognize the compelling strategic and economic benefits of this transaction," said Yucaipa's founder, Ron Burkle. "Pathmark has tremendous assets on which to build, and we are eager to work with the Pathmark team to help the Company capitalize on its strong market position and competitive advantages." Under the terms of the agreement announced on March 24, 2005, The Yucaipa Companies LLC, a Los Angeles based private equity firm, will purchase from Pathmark 20,000,000 newly-issued shares of the Company's common stock, Series A warrants to purchase 10,060,000 shares of the Company's common stock and Series B warrants to purchase 15,046,350 shares of the Company's common stock for an aggregate purchase price of $150 million in cash. The 20,000,000 shares will represent approximately 40% of Pathmark's outstanding common stock. The Series A warrants have an exercise price of $8.50 per share and a three-year term and the Series B warrants have an exercise price of $15.00 per share and a ten-year term. Pathmark is a regional supermarket chain currently operating 142 supermarkets primarily in the New York - New Jersey and Philadelphia metropolitan areas. Pathmark's stores average 52,400 square feet in size and include 129 in-store full service pharmacies and a wide array of financial services offered by 82 in-store banks. Additional information about Pathmark may be found at its website, www.pathmark.com. Founded in 1986, The Yucaipa Companies LLC, has completed mergers and acquisitions valued in excess of $30 billion. Yucaipa is widely recognized as a leader in acquisitions, mergers and management of large retail and distribution entities. As a hands-on investor, the company works with management to strategically reposition businesses and implement operational improvement, resulting in value creation for investors. Specific investments by Yucaipa in the Supermarket sector have included Food4Less, Dominick's, Ralphs Grocery Co., Smith Food and Drug, and Fred Meyer. This press release contains certain "forward-looking statements" that are subject to risks and uncertainties and could cause actual results to differ materially. For these statements, the Company claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Factors that may affect results include changes in business and economic conditions generally and in the Company's operating areas, the competitive environment in which the Company operates and other risks detailed from time to time in the Company's reports and filings available from the Securities and Exchange Commission.