BOSTON, MA, Nov 06 (MARKET WIRE) --
Costa Brava Partnership III L.P. ("Costa Brava"), a preferred stockholder
of Newcastle Investment Corp. ("Newcastle") (NYSE: NCT) (NYSE: NCT.PrB)
(NYSE: NCT.PrC) (NYSE: NCT.PrD), objects to Newcastle's proposed
amendments to the rights of Newcastle's preferred stock and the offered
redemption and does not at this time plan to vote for the amendment or to
tender its shares. In making this announcement, Costa Brava first
stresses that Costa Brava believes in the future of Newcastle.
Newcastle, citing market conditions, is seeking a consent solicitation
amending certain key terms of such stock and has announced an offer to
repurchase its outstanding preferred stock in an attempt to reduce or
eliminate its outstanding preferred stock.
Newcastle is proposing a tender offer price of $6.76-7.19 per share for
each of its series B, C and D preferred stock. Seth Hamot, a principal
with Costa Brava, explained that "The offered price per share represents a
substantial 75% discount to the $25 liquidation preference, a much deeper
discount than one would typically expect."
In addition, Newcastle is proposing to deregister the preferred stock from
the current listings on the New York Stock Exchange, thereby making the
non-tendered shares difficult to trade and much less valuable. Mr. Hamot
commented that "This is essentially an attempt to get rid of the preferred
stockholders at a value that is significantly below the true value of the
shares, coupled with the threat that if a preferred stockholder does not
tender, the shares will be almost worthless. Essentially, Newcastle's
preferred stockholders are paying a steep price in exchange for
substantial benefits to Newcastle's common stockholders." Costa Brava
believes that the proposed exchange offer and amendments are inadequate
at best and coercing at worst and that preferred stockholders are giving
up too much potential value by accepting the offer.
Mr. Hamot concluded that, "We don't want the company to cash out the
preferred stockholders on the proposed terms at the benefit of the common
stockholders. The deal certainly doesn't 'pencil out,' and it's too little
money to just go away from what we believe is an opportunity to be part of
a business with good potential."
Contact:
Costa Brava Partnership III L.P.
Seth Hamot
617-595-4405
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