DALLAS, Oct. 10 /PRNewswire-FirstCall/ -- National Energy Group, Inc.
(OTC Bulletin Board: NEGI) (the "Company") today provided an update on its
previously disclosed board special committee process, which was initiated to
review the July 8, 2005 proposal from American Real Estate Partners, L.P.
("AREP"), the beneficial holder of 50.1% of the Company's outstanding shares,
regarding a transaction pursuant to which the existing shareholders of the
Company, other than AREP, would receive $3.00 in cash in respect of each of
their shares of the Company's common stock. By letter dated today, the
special committee has notified AREP and the Company's board of directors of
its determination that, based on a thorough review of the proposal by the
special committee and its financial and legal advisors, the proposal is
inadequate from a financial point of view to the Company's minority
shareholders. During the special committee's evaluation of the cash proposal
and its related discussions with AREP, the special committee also examined an
alternative proposal under which the Company's minority stockholders would be
allocated a 2% interest in the pre-IPO equity of a company to be formed for
the purpose of owning all or a portion of the assets of NEG Holdings LLC,
National Onshore, LP (formerly known as Trans Texas Gas Company) and Panaco,
Inc. The special committee's letter also indicates that the committee has
determined that the alternative approach is also inadequate from a financial
point of view to the Company's minority shareholders. The special committee
has indicated in its letter that it is willing to consider any amended
proposal that AREP might put forward.
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.
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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