S1 Rejects Investor Calls To Sell TheCompany

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ATLANTA - (04/04/06) -- S1 Corp. said Friday it will followthrough with its reorganization, rather than sell itself, assuggested last week by Ramius Capital Group LLC, an investmentcompany with an 8.6% stake in S1. In a letter to the S1 Board lastweek, Ramius Capital said it believes S1's assets are undervaluedand the best way to maximize their value is for a sale of thecompany. The investors also said they may file a slate of directorsfor election for the S1 Board at this year's annual meeting. S1 isdue to launch its new Enterprise 3.5 product soon, but Ramius Groupsaid it is skeptical about the potential benefits of waiting forthe product. Ramius Group noted that since the beginning of fiscal2002, S1's share price has declined by about 77% and its revenueshave fallen by about 14%. "We do not believe that the potentialsuccess of this product is adequate justification for the companyto remain a stand-alone entity," the group said in its letter tothe board. S1 reported a net loss of $1.1 million on $204.1 millionin revenue in 2005, and took $15 million in restructuring charges.In its response to Ramius Group, S1 said, "we have put in place asubstantial reorganization and have an exciting and dynamicbusiness plan for success. We believe that this business plan isjust starting to show results, and that the long-term best interestof all shareholders will be served by executing on that businessplan, rather than selling the Company now at a time whenshareholders will not receive the value imbedded in thisbusiness."

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