National Atlantic Holdings Corporation to Merge with Palisades Safety and Insurance...

National Atlantic Holdings Corporation to Merge with Palisades Safety and Insurance Association

FREEHOLD, N.J.--(Business Wire)--
National Atlantic Holdings Corporation (NASDAQ: NAHC) has
announced today that it has entered into a definitive merger agreement
to be acquired by a subsidiary of Palisades Safety and Insurance
Association, ("Palisades") a New Jersey licensed insurance exchange.
Under the terms of the agreement, each outstanding share of common
stock of National Atlantic will be canceled and converted into the
right to receive $6.25 in cash per share.

The Board of Directors of National Atlantic has approved the
merger agreement and recommends that National Atlantic's shareholders
approve the merger.

The closing of the merger is expected to occur in the third
quarter of 2008. The merger is subject to the approval of National
Atlantic's shareholders, certain regulatory approvals and the
satisfaction or waiver of other closing conditions. The merger is not
subject to a financing condition.

"The acquisition of National Atlantic by Palisades represents an
outstanding opportunity to combine two of the leading New Jersey
property-casualty insurers into a cohesive, highly competitive and
efficient organization for our Partner Agencies, their policyholders
and our employees," said James V. Gorman, Chairman of the National
Atlantic Board of Directors and Chief Executive Officer. "The future
prospects of this new organization are very bright and we are pleased
to merge with the excellent companies comprising the Palisades Group,"
he stated.

Banc of America Securities LLC has acted as the financial advisor
to National Atlantic.

About NAHC:

National Atlantic Holdings Corporation and its subsidiaries
provide property and casualty insurance and insurance-related services
to individuals, families and businesses in the State of New Jersey.

In connection with the proposed transaction, a proxy statement of
National Atlantic and other materials will be filed with SEC. WE URGE
INVESTORS TO READ THE PROXY STATEMENT AND THESE OTHER MATERIALS
CAREFULLY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION ABOUT NATIONAL ATLANTIC AND THE PROPOSED
TRANSACTION. Investors will be able to obtain free copies of the proxy
statement (when available) as well as other filed documents containing
information about National Atlantic at http://www.sec.gov, the SEC's
free internet site. Free copies of National Atlantic's SEC filings are
also available on National Atlantic's internet site at
http://www.national-atlantic.com. Stockholders of National Atlantic
can obtain more information about the proposed transaction by
reviewing the Form 8-K to be filed by National Atlantic in connection
with the announcement of the entry into the merger agreement, and any
other relevant documents filed with the SEC when they become
available.

National Atlantic and its executive officers and directors may be
deemed, under SEC rules, to be participants in the solicitation of
proxies from National Atlantic's stockholders with respect to the
proposed merger. Information regarding the officers and directors of
National Atlantic is set forth in National Atlantic's proxy
statements, previously filed with the SEC. More detailed information
regarding the identity of potential participants, and their direct or
indirect interests, by securities holdings or otherwise, will be set
forth in the proxy statement and other materials to be filed with the
SEC in connection with the proposed merger.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This press release contains forward-looking statements, such as
those including the words "expect," "will," and similar expressions,
that involve risks and uncertainties that could cause actual results
and events to differ materially from those anticipated, including the
risk National Atlantic's business and its relationships with
customers, employees or suppliers could suffer due to the uncertainty
relating to the merger; that the merger with Palisades may not be
consummated or may be delayed due to a failure of the conditions to
close the merger to be satisfied or a failure of Palisades to close
the transaction; and such other risk factors as may be included from
time to time in the reports of National Atlantic filed with the SEC
and posted in the Investor Relations section of National Atlantic's
web site (http://www.national-atlantic.com.). The forward looking
statements included in this document are made only as of the date of
this document and National Atlantic does not undertake any obligation
to update or revise any forward-looking statements, whether as a
result of new information, future events, or otherwise, except as
required by law.

National Atlantic Holdings Corporation
Frank Prudente, 732-665-1145
investorrelations@national-atlantic.com

Copyright Business Wire 2008