SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Date
of
Report (Date of earliest event reported): August 9, 2007
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American
Real Estate Partners, L.P.
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(Exact
name of registrant as specified in its charter)
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Delaware
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1-9516
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13-3398766
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(State
or Other Jurisdiction
of Incorporation) |
(Commission
File Number)
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(IRS
Employer
Identification
No.)
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767
Fifth Avenue, Suite 4700, New York, NY 10153
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(Address
of Principal Executive Offices) (Zip
Code)
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Registrant’s
Telephone Number, Including Area Code: (212)
702-4300
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N/A
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(Former
Name or Former Address, if Changed Since Last Report)
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Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
| o |
Written
communication pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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o
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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o
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR
240.14d-2(b))
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o
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR
240.13e-4(c))
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Section
8 - Other Events
Item
8.01 - Other Events.
On
August
9, 2007, American Real Estate Partners, L.P. (“AREP”) issued a press release
announcing its acquisition of Carl C. Icahn’s partnership interests in the
management company and general partners of the Icahn Funds, a group of private
investment funds managed by Mr. Icahn. A copy of AREP’s press release is
attached as Exhibit 99.1. For further description of the acquisition, please
refer to Part II, Item 5 (Other Information) of our Quarterly Report on Form
10-Q filed with the Securities and Exchange Commission on August 9,
2007.
Section
9 - Financial Statements and Exhibits
Item
9.01(d) Exhibits
Exhibit
Index
| 99.1 |
Press
Release dated August 9, 2007
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[remainder
of page intentionally left blank; signature page follows]
2
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant
has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
| AMERICAN
REAL ESTATE PARTNERS, L.P. (Registrant) |
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| By: |
American Property Investors,
Inc.,
its
General Partner
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| Date: August 9, 2007 | By: | /s/ Andrew R. Skobe |
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Andrew R. Skobe Chief
Financial Officer
American
Property Investors, Inc.,
the
General Partner of
American
Real Estate Partners, L.P.
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Investor
Contact:
Andrew
Skobe
Interim
CFO
(212)
702-4300
For
Release: August 9, 2007
American
Real Estate Partners, L.P. Acquires Icahn Funds Management Company and General
Partners with $7 billion in Assets Under Management for $810 million in AREP
Depositary Units and Contingent Earn-Out Payments
American
Real Estate Partners, L.P. to change name to Icahn Enterprises,
L.P.
New
York, NY -
American Real Estate Partners, L.P. (“AREP”) (NYSE: ACP) today announced that it
has acquired Carl C. Icahn’s interests in the management company and general
partners (the “Icahn Management Entities”) of the Icahn Funds, a group of
private investment funds managed by Mr. Icahn. The Icahn Funds have committed
capital of approximately $7.0 billion as of June 30, 2007, including the capital
of Mr. Icahn and his affiliated entities.
The
purchase price for this transaction consists of $810 million of AREP Depositary
Units plus a five-year contingent earn-out payable in additional Depositary
Units based on our achieving specified net after-tax earnings from the fund
management business. Specifically, the additional payout of up to a maximum
of
$1.1 billion of Depositary Units under the earn-out is subject to our achieving
net after tax earnings from 2007 through 2011 of $3.9 billion from the fund
management business.
For
the
12-months ended June 30, 2007, the Icahn Management Entities had an average
of
approximately $3.5 billion in third-party fee paying assets under management,
which generated approximately $80 million of management fees and approximately
$240 million in incentive income (a portion of which is accrued but not earned
until the end of the year) for a total of approximately $320 million in fees.
Today, there is approximately $5.0 billion of third-party fee paying assets
under management. The typical third-party investor in the Icahn Funds is charged
a 2.5% management fee and a 25% incentive allocation (subject to a high
watermark) and is subject to an initial lock-up.
The
Icahn
Funds were launched in November 2004 with approximately $1.0 billion in assets
under management, of which $300 million was provided by Carl Icahn and his
affiliated entities. Less than three years later, the Icahn Funds have grown
to
approximately $7.0 billion of committed capital, of which approximately $1.8
billion represents capital of Mr. Icahn and his affiliated
entities.
Mr.
Icahn
stated: “This transaction represents a transformational event for American Real
Estate Partners, which will now be called Icahn Enterprises. The name change
reflects the continued evolution of our business and its importance within
my
portfolio of holdings.”
AREP
also
presently intends to purchase approximately $700 million of limited partnership
interests in the Funds on which it will not be required to pay management fees
or incentive allocation.
The
Icahn
Management Entities provide investment advisory and certain other management
services to the Icahn Funds. The Icahn Management Entities do not presently
provide investment advisory or other management services to any other entities,
individual or accounts, and interests in the Icahn Funds are offered only to
certain sophisticated and accredited investors on the basis of exemptions from
the registration requirements of the federal securities laws and are not
publicly available.
Mr.
Icahn
concluded, “AREP has a strong balance sheet with cash and liquid investments of
approximately $4.5 billion, pro forma for the sale of our gaming business.
We
intend to provide capital to grow our management companies, grow our existing
businesses and make further acquisitions. Furthermore, going forward we will
be
in a position to capitalize on expected volatile market conditions, utilizing
our expertise in activist investing both in equity and distressed securities.
I
believe that activist investing provides the best risk adjusted returns in
all
markets.”
In
addition, Mr. Icahn has entered into a five-year employment agreement to serve
as Chairman of AREP and Chief Executive Officer of the Icahn Management
Entities. The agreement provides for a base salary of $900,000 per year and
for
substantial contingent bonus payments based on (a) returns on assets under
management and (b) our achieving non-hedge fund management related income over
$400 million in any year. Mr. Icahn has also entered into a ten-year
non-competition agreement.
The
transactions and Mr. Icahn’s employment agreement were approved by the Special
Committee of the independent directors of our general partner, and by the full
board of directors. The Special Committee was represented by Debevoise
& Plimpton LLP as its independent counsel. In addition, Sandler
O’Neill & Partners, L.P. was retained by the Special Committee as its
financial adviser. The Special Committee also retained Johnson & Associates,
Inc. and BDO Seidman, LLP to advise on the terms of Mr. Icahn’s employment
agreement.
*
* *
American
Real Estate Partners, L.P. (NYSE: ACP), a master limited partnership, is a
diversified holding company engaged in two primary business segments: Real
Estate and Home Fashion. For more information, please visit the company’s
website at www.arep.com.
Conference
Call Information
AREP
will
discuss this press release and second quarter results on a conference call
and
Webcast on Thursday, August 9, 2007 at 2:00 p.m. EDT. The Webcast can be
viewed live on AREP’s website at www.arep.com.
It will
also be archived and made available at www.arep.com
under
the Investor Relations Section. The toll-free dial-in number for the conference
call in the US is (800) 289-0485. The international number is 1-913-981-5518.
The access code for both is 8876451.
Caution
Concerning Forward-Looking Statements
This
release contains certain “forward-looking statements” within the meaning of the
Private Securities Litigation Reform Act of 1995, many of which are beyond
our
ability to control or predict. Forward-looking statements may be identified
by
words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,”
“estimates,” “will,” or words of similar meaning and include, but are not
limited to, statements about the expected future business and financial
performance of AREP and its subsidiaries. Among these risks and uncertainties
are risks related to our gaming and associated hotel, restaurant and
entertainment operations, including the effects of regulation, substantial
competition, rising operating costs and economic downturns; risks related to
our
real estate activities, including the extent of any tenant bankruptcies and
insolvencies, our ability to maintain tenant occupancy at current levels, our
ability to obtain, at reasonable costs, adequate insurance coverage and
competition for investment properties; risks
related to our home fashion operations, including changes in the availability
and price of raw materials, changes in customer preferences and changes in
transportation costs and delivery times; and other risks and uncertainties
detailed from time to time in our filings with the SEC. We undertake no
obligation to publicly update or review any forward-looking information, whether
as a result of new information, future developments or otherwise.