Filed
Pursuant to Rule 425
Filing
Person: American Real Estate Partners, L.P.
Subject
Company: Reckson Associates Realty Corp.
Commission
File Number: 1-13762
AREP
FOR
IMMEDIATE RELEASE
AMERICAN
REAL ESTATE PARTNERS, L.P. SUBMITS PROPOSAL LETTER TO RECKSON ASSOCIATES REALTY
CORP.
New
York, New York / December 4, 2006
-
American
Real Estate Partners, L.P. (NYSE: ACP) (“AREP”)
today submitted
a proposal letter to Reckson Associates Realty Corp. (NYSE: RA), the text of
which is as follows:
American
Real Estate Partners, L.P.
767
Fifth Avenue, Suite 4700
New
York, NY 10153
December
4, 2006
Mr.
Peter
Quick
Lead
Director, Independent Committee
Board
of
Directors
Reckson
Associates Realty Corp.
625
Reckson Plaza
Uniondale,
NY 11556
Dear
Mr.
Quick:
On
behalf
of entities wholly owned by American Real Estate Partners, L.P. (“AREP”), a
Delaware limited partnership, whose Depositary Units trade on the New York
Stock
Exchange under the symbol ACP and which are approximately 90% owned by Carl
Icahn, we are pleased to submit this proposal to acquire all of the outstanding
shares and units of Reckson Associates Realty Corp. and Reckson Operating
Partnership, L.P. (together, “Reckson”) in a transaction that provides Reckson
shareholders and unitholders with value that is superior to the pending
transaction with SL Green Realty Corp. (“SL Green”), Marathon Asset Management
and certain members of Reckson management.
AREP
has
interests
in
businesses in a variety of industries, including real estate, gaming, and
textiles, among others. The market value of AREP’s outstanding Depositary Units,
which trade on the NYSE, is approximately $5 billion. In addition, AREP and
its
subsidiaries have an aggregate cash position, including marketable securities,
of approximately $2.3 billion.
AREP
is
proposing to acquire all of the outstanding shares (and units) of Reckson
through a transaction in which shareholders (and unitholders) would receive
a
consideration per share (and unit) of $49.00, consisting of $1 billion in cash
and the balance of $3.3 billion in a new class of AREP Preferred Units (the
“Merger Preferred”), which would be convertible into Depositary Units at a 30%
premium above last Friday’s closing price of $80.35 for the Depositary Units,
resulting in the conversion price of $104.50 per Depositary Unit. According
to
our analysis of comparable preferred securities, we expect the Merger Preferred
to be valued at par. No closing conditions, other than those that would be
required for the SL Green transaction, would be necessary to consummate our
proposed transaction and it will not be subject to a financing condition.
We
anticipate no delay in negotiating a definitive acquisition agreement. In fact,
our proposed acquisition agreement, a draft of which will be delivered to you
by
no later than on Tuesday, December 5, will be substantively the same as
Reckson’s merger agreement with SL Green with changes to reflect the difference
in the proposed transaction. Once our bid is accepted as a superior bid and
we
agree on the terms of the merger agreement we will immediately deposit
approximately $613 million into escrow. This sum includes the break up fee
payable to SL Green and a good faith deposit by the AREP parties which will
be
forfeited to Reckson should the AREP parties not meet their obligations pursuant
to the merger agreement.
The
terms
of the Merger Preferred are set forth on Exhibit A attached hereto. Briefly,
there will be $3.3 billion face amount of a new class of Preferred Units, which
will have one vote per Unit on all matters on which the Depositary Units have
a
vote and as required by law. In addition, the Merger Preferred will have an
aggregate liquidation value equal to its par value of $3.3 billion plus accrued
but unpaid dividends, if any, and will be fully redeemed on December 31, 2018.
Should the Depositary Units trade at or in excess of 120% of the Conversion
Price for a period of 20 consecutive business days or for any 20 business days
out of 30 business days at any time after January 1, 2008, the Merger Preferred
will automatically convert into Depositary Units on the tenth business day
thereafter. In addition to the foregoing, the Merger Preferred will carry a
preferred dividend at a rate of 5% per annum computed on the liquidation value
of the preferred and the dividend will be paid semi-annually on July 15 and
January 15 each year and at redemption.
We
are
enthusiastic about a transaction with Reckson and believe the terms of our
proposal provide the best way to maximize value for your shareholders.
We
look
forward to your prompt response.
| Very truly yours, | ||
| AMERICAN REAL ESTATE PARTNERS, L.P. | ||
| By: American Property Investors, Inc., its general partner | ||
| |
|
|
| By: | /s/ Carl C. Icahn | |
|
Carl C. Icahn, Chairman of the Board |
||
AREP,
a
master limited partnership, is a diversified holding company engaged in a
variety of businesses. AREP’s businesses currently include gaming; real estate
and textiles. To learn more about AREP, please visit www.arep.com.
This
release contains certain “forward-looking statements” within the meaning of the
Private Securities Litigation Reform Act of 1995, many of which are beyond
AREP’s 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. AREP undertakes no
obligation to publicly update or review any forward-looking information, whether
as a result of new information, future developments or otherwise.
For
further information, please contact:
Keith
Meister
Vice
Chairman and Principal Executive Officer
American
Real Estate Partners, L.P.
(212)
702-4300
767
Fifth Avenue, New York, New York 10153 - Telephone (212) 702-4300 - Fax (212)
750-5841
NYSE
- ACP
Additional
Information and Where to Find It
This
press release is being made pursuant to and in compliance with Rules 135,165
and
425 of the Securities Act of 1933 and does not constitute an offer of any
securities for sale or a solicitation of an offer to buy any securities. In
connection with the proposed transaction, we expect to file an information
statement/prospectus as part of a registration statement regarding the proposed
transaction with the Securities and Exchange Commission, or SEC. Investors
and
security holders are urged to read the information statement/prospectus because
it will contain important information about us and Reckson and the proposed
transaction. Investors and security holders may obtain a free copy of the
definitive information statement/prospectus and other documents when filed
by us
with the SEC at the SEC’s website at www.sec.gov.
The
definitive information statement/prospectus and other relevant documents may
also be obtained free of charge from us by directing such requests to: American
Real Estate Partners, L.P., 767 Fifth Avenue, Suite 4700, New York, NY, 10153,
Attention: Investor Relations. Investors and security holders are urged to
read
the proxy statement, prospectus and other relevant material when they become
available before making any voting or investment decisions with respect to
the
proposed transaction.