DALLAS, July 8 /PRNewswire-FirstCall/ -- National Energy Group, Inc.
(OTC Bulletin Board: NEGI) (the "Company") today announced that on
July 8, 2005 the Company received a proposal from American Real Estate
Partners, L.P. ("AREP"), the holder of 50.1% of the Company's outstanding
shares, regarding a transaction pursuant to which the existing shareholders of
the Company would receive $3.00 in cash in respect of each share of the
Company's common stock which they now own and AREP or its subsidiaries would
own 100% of the Company. AREP's proposal has been submitted to the Company's
board of directors for consideration.
National Energy Group, Inc. is a Dallas, Texas based company.
This press release may contain projections and other forward-looking
statements within the meaning of Section 21E of the Securities Exchange Act of
1934, as amended. Any such projections or statements reflect the Company's
current views with respect to future events and financial performance. No
assurances can be given, however, that these events will occur or that such
projections will be achieved and actual results could differ materially from
those projected. A discussion of important factors that could cause actual
results to differ materially from those projected is included in the Company's
periodic reports filed with the Securities and Exchange Commission.
American Real Estate Partners, L.P.
100 South Bedford Road
Mt. Kisco, NY 10549
July 8, 2005
Board of Directors
National Energy Group, Inc.
4925 Greenville Avenue, Suite 1400
Dallas, Texas 75206
Gentlemen:
As you know, American Real Estate Partners, L.P., a Delaware limited
partnership ("AREP"), through its subsidiaries is the owner of 50.1% of the
issued and outstanding common stock of National Energy Group, Inc., a Delaware
corporation ("NEG").
By this letter, we are proposing that NEG and AREP enter into a
transaction pursuant to which the existing shareholders of NEG would receive
$3.00 in cash in respect of each NEG share which they now own and AREP or its
subsidiaries would own 100% of NEG.
Depending upon the ultimate structure, the transaction could be subject to
a vote of shareholders of NEG. Given its ownership of a majority of NEG's
outstanding shares, AREP would be in a position to approve the transaction.
We anticipate that the Board of Directors will form a special committee of
independent directors (the "Committee") to respond to our proposal. We
request the opportunity to present fully our proposal to the Committee and
answer any questions at the Committee's earliest convenience.
Obviously, neither NEG, on the one hand, nor AREP, on the other, will have
any legal obligation relating to the transaction until mutually satisfactory
definitive agreements have been executed by all parties, and there can be no
assurance as to the price or other terms at which any potential transaction
may be completed or that you or we will proceed with any transaction.
We look forward to hearing from you and appreciate your consideration of
this important matter.
This letter does not constitute a binding offer or agreement between us,
as it is intended merely as an expression of our interest in discussing a
transaction. No agreement shall exist between us regarding the proposed
transaction prior to the execution of definitive documents agreeable to each
of us.
Very truly yours,
AMERICAN REAL ESTATE
PARTNERS, L.P.
By: American Property Investors,
Inc., its general partner
By: /s/ Keith Meister
Name: Keith Meister
Title: Chief Executive Officer
SOURCE National Energy Group, Inc.
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Related links:
http://www.negx.com
CONTACT:
Bob G. Alexander, Philip D. Devlin, or
Randall D. Cooley, all of National Energy Group, Inc.,
+1-214-692-9211, or fax, +1-214-692-5055
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