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DSP Group Issues Letter To Shareholders: A Minority Shareholder Is Seeking To Hijack Your Company

SAN JOSE, Calif., April 18, 2013 (GLOBE NEWSWIRE) -- DSP Group ®, Inc. (Nasdaq:DSPG), a leading global provider of wireless chipset solutions for converged communications, issued today the following letter to its shareholders:

Attention DSP Group Shareholders:

A Minority Shareholder Is Seeking to Hijack Your Company

April 18, 2013

Dear Fellow DSP Group Shareholders,

We write to report on your Company's and your Board's recent accomplishments and plans and to strongly urge you to reject the attempt of a narrowly-focused minority shareholder to seize control of the Board of your Company.

On April 4, 2013, Starboard Value and Opportunity Master Fund Ltd, an activist hedge fund, and certain of its affiliates launched a proxy fight that, if successful, would result in directors selected by Starboard obtaining majority control of the Board of DSP Group, Inc. As of March 13, Starboard owned only approximately 10.2% of DSP Group's common stock, and already has two hand-picked representatives serving on the Board, who were appointed last year, in order to avoid a threatened proxy fight.

Starboard Has Refused to Settle for Anything Less Than Effective Control of your Company by Its Nominees

We have again this year done our utmost to avoid a proxy fight with Starboard, and the distraction and expense it represents for your Company and its Board and management. We offered Starboard increased board representation by nominating two additional directors and significant participation on Board committees, but to no avail. Based on our negotiations with Starboard and the preliminary proxy they filed, it seems they will be satisfied with nothing less than a majority of the Board consisting of hand-picked Starboard nominees that will control your Company – without paying any premium for that control and despite Starboard's equity ownership of only about one-tenth of the Company's shares.

We believe giving Board control to Starboard is not only disproportionate and inappropriate, but that doing so would not be in the best interests of DSP Group, our fellow shareholders, our customers around the world or our employees. From our communications with Starboard, and from the comments they made in the preliminary proxy they filed, it is clear to us that they don't know our business, and they don't have a plan to grow the Company. They have made it clear that they have one and only one goal - to "explore strategic alternatives" with the objective of selling your Company as quickly as possible, resulting in a potential short-term gain at the expense of building durable shareholder value.

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