Telelogic's Board of Directors recommends the offer from IBM

Telelogic's Board of Directors recommends the offer from IBM

MALMÖ, Sweden - June 11, 2007 - Statement by the Board of Directors of Telelogic
AB (publ) in relation to the public offer from International Business Machines
Corporation.

Summary
- Offer price of SEK 21 in cash per Telelogic share, which values the Offer at
approximately SEK 5.2 billion. 
- The Offer represents a premium of approximately (i) 21 per cent to the closing
share price on 31 May 2007, being the last day prior to market speculation
regarding a potential acquisition of Telelogic; (ii) 25 per cent to the average
closing share price for the last 20 trading days up to and including 31 May
2007; (iii) 39 per cent to the average closing share price for the last 60
trading days up to and including 31 May 2007; and (iv) 42 per cent to the
average closing share price for the last 120 trading days up to and including 31
May 2007.
- The Board of Directors of Telelogic unanimously recommends shareholders to
accept the Offer. (Footnote 1)
- A press conference will be held at Operaterrassen, in Stockholm, today at
13.00 (CET). Details are set out below.

Bo Dimert, Chairman of the Board of Telelogic, said: "After carefully evaluating
the Offer and considering the future prospects of Telelogic, it is the Board's
opinion that the transaction is favourable to our shareholders. Therefore, the
Board unanimously recommends this Offer. By combining with IBM, Telelogic will
have a greater opportunity to accelerate its growth globally and be able to
provide customers a more comprehensive solution for complex software
development."

Anders Lidbeck, President and CEO of Telelogic, said: "This transaction creates
potential for offering our customers further support in developing and
implementing complex systems across the globe. Our combined customer base will
now be able to leverage a full powerful end-to-end set of products and services.
For our employees, the transaction has potential to create new, interesting
opportunities worldwide in a leading IT company."

Background 
This statement is issued by the Board of Directors of Telelogic AB (publ)
(“Telelogic”) pursuant to section II.14 of the Stockholm Stock Exchange Takeover
Rules.

Today, International Business Machines Corporation (“IBM”), through its indirect
wholly-owned subsidiary Goldcup D 2933 AB (with a proposed change of name to
Watchtower AB) (“Watchtower”),  announced a public cash offer to the
shareholders of Telelogic to acquire all outstanding shares of Telelogic (the
“Offer”). Telelogic's shareholders are offered SEK 21 in cash for each Telelogic
share tendered.

Together, Telelogic and IBM will be able to expand and accelerate its customers'
ability to define, model, build, test, deliver and govern the development of
complex systems with higher quality and faster time to market. Telelogic will
also benefit from access to IBM's worldwide sales and services organization.

After completion of the transaction, Telelogic will become part of IBM's
Rational Software unit.

IBM has stated that it believes that Telelogic's employees, products and
technology are, and will continue to be, very important for the continued
successful development of the business. Furthermore, according to IBM, organic
growth and acquisitions will continue to be an important part of the strategic
development of Telelogic. The Board of Directors of Telelogic trusts that this
description is accurate and has no different opinion.

For details regarding the Offer, please see today's offer announcement from IBM.

Members of the Board of Directors of Telelogic holding shares in Telelogic have
irrevocably undertaken to accept the Offer and tender all of their Telelogic
shares into the Offer. Those board members hold in aggregate approximately 0.5
per cent of the issued and outstanding share capital and voting rights in
Telelogic. The irrevocable undertakings would lapse in the event that a third
party announces a public offer to acquire all outstanding shares in Telelogic at
a price per share that is higher than the price per share under the Offer.
However, if Watchtower announces a revised Offer and such revised Offer receives
the Telelogic Board's recommendation, the irrevocables would become binding
again.

As set forth in IBM's offer announcement, IBM has offered and will offer
relevant key people at Telelogic to be part of a separate bonus plan, a so
called retention arrangement, provided that the Offer is completed at an
acceptance level above 50 per cent of all Telelogic shares on a fully diluted
basis. In connection therewith such employees have been requested to accept
certain no-compete and non-solicitation undertakings to IBM. The Swedish
Securities Council has accepted this arrangement, subject among other things to
the Telelogic Board's prior approval. (Footnote 2) The Board has approved such
an arrangement, provided that it be made conditional upon the Offer being
completed at an acceptance level above 50 per cent of all Telelogic shares on a
fully diluted basis. Further information on the retention arrangement will be
set out in the offer document that will be drawn up and published by IBM for the
purposes of the Offer.

Due diligence and offer agreement
At IBM's request, the Board of Directors of Telelogic has permitted IBM to
perform due diligence prior to the announcement of the Offer, since the Board of
Directors judged that a public offer from IBM would be of interest for
Telelogic's shareholders to assess.

Telelogic and IBM have entered into an offer agreement, the content of which is
summarized in IBM's offer announcement. As set forth therein, Telelogic has
agreed, subject to among other things approval from the Swedish Securities
Council, to reimburse Watchtower for costs, fees and expenses incurred in
connection with the Offer if Telelogic's Board of Directors withdraws or
adversely modifies its recommendation of the Offer and in the event of certain
breaches of the agreement. The offer agreement will be disclosed in its entirety
in the offer document that will be drawn up and published by IBM for the
purposes of the Offer.

Employee stock options
The Board of Directors of Telelogic has agreed with IBM that the holders of
Telelogic employee stock options are to be offered to waive their rights under
these options in exchange for cash consideration, conditional upon the Offer
being declared unconditional at an acceptance level above two-thirds of all
Telelogic shares on a fully diluted basis. The employees concerned will be
informed separately of the details of such offer.

The recommendation by the Board of Directors
The Board of Directors has based its recommendation on an evaluation of factors
and considerations that the Board has deemed relevant in relation to the Offer.
These include, but are not limited to, Telelogic's current and estimated forward
operating and financial performance in a highly competitive environment,
Telelogic's position in the consolidating software development industry, the
commercial benefits of the proposed combination, other strategic alternatives
available to Telelogic and its potential to make the necessary investments to
increase its scale and generate enhanced shareholder value on a stand-alone
basis. It is the opinion of the Board, based on the strategic plans and
objectives set forth in the Offer, that a combination of the two companies would
create a strong, competitive and stable global platform for the further
development of Telelogic's business. 

Telelogic's Board of Directors has been advised by financial and other advisers
in its assessment of the Offer. The Board of Directors' financial adviser is UBS
Limited (“UBS Investment Bank”) and its legal adviser is Advokatfirman Vinge KB.
UBS Investment Bank has issued a Fairness Opinion to the Board of Directors with
the opinion that, subject to the qualifications and assumptions therein, the
consideration offered is fair from a financial point of view. The Fairness
Opinion will be disclosed in its entirety in the offer document that will be
drawn up and published by IBM for the purposes of the Offer and should be read
in full to understand the limitations set out therein. (Footnote 3)

Based on the above, the Board of Directors of Telelogic unanimously recommends
the shareholders of Telelogic to accept the Offer. (Footnote 4)

This statement shall in all respects be governed by and construed in accordance
with Swedish law. Any dispute arising out of or in connection with this
statement shall be settled exclusively by Swedish courts.

Malmö, 11 June 2007

Board of Directors
Telelogic AB (publ)

Footnotes:
1, The President and CEO of Telelogic, Anders Lidbeck, has not participated in
Telelogic's Board of Directors' deliberations and resolutions regarding the
Offer and this recommendation.
2, Securities Council Statement 2007:15.
3, In its capacity as Telelogic's financial adviser in connection with this
transaction, UBS Investment Bank is entitled to receive a so called success fee
in the event that an offer for Telelogic is completed.
4,  Due to a potential conflict of interest - caused by the fact that he has
entered into a retention arrangement with IBM and accepted certain no-compete
and non-solicitation undertakings to IBM in connection therewith (see above and
Securities Council Statement 2007:15) - Anders Lidbeck, who is also the
President and CEO of Telelogic, has not participated in Telelogic's Board of
Directors' deliberations and resolutions regarding the Offer and this
recommendation.


Press conference
A press conference will be held at Operaterrassen, in Stockholm, today at 13.00
(CET). For further information, please go to www.financialhearings.com.

Address:
Operaterrassen
Karl XII:s torg
Stockholm

For further information please contact:
Anders Lidbeck
Telelogic President and Chief Executive Officer
+46 (40) 650 00 00

Catharina Paulcén
Telelogic EVP Corporate Communications
+46 (40) 17 47 30
catharina.paulcen@telelogic.com

Knut Ramel 
Managing Director, UBS Investment Bank (Europe)
+46 73 593 2725
knut.ramel@ubs.com
Financial Adviser to Telelogic

Affan Butt 
Executive Director, UBS Investment Bank (Europe)
+44 (20) 756 73599
affan.butt@ubs.com
Financial Adviser to Telelogic

Eric Mandl 
Executive Director, UBS Investment Bank (US)
+1 (212) 821 4684
eric.mandl@ubs.com
Financial Adviser to Telelogic