Exhibit 99.1
Contact: John P. Saldarelli
American Property Investors, Inc.
Chief Financial Officer, Secretary and Treasurer
914.242.7700
Contact: Lorraine D. Miller, CFA
WestPoint Stevens Inc.
Senior Vice President
Finance and External Communications
404.378.0491
FOR IMMEDIATE RELEASE
WESTPOINT STEVENS SALE TO AMERICAN REAL ESTATE PARTNERS
COMPLETED
NEWLY CREATED WESTPOINT INTERNATIONAL, INC. WILL BENEFIT
FROM STRONG CAPITAL STRUCTURE
Mount Kisco, New York and West Point, Georgia, August 8, 2005 - American Real
Estate Partners, L.P. (NYSE: ACP) ("AREP") and WestPoint Stevens Inc. (Pink
Sheet: WSPTQ.PK) ("WestPoint Stevens" or the "Company") announced today that
WestPoint Stevens has completed the sale of substantially all of the Company's
assets to WestPoint International, Inc., a newly created entity a majority of
the voting securities of which will be owned by AREP. AREP, which is affiliated
with Carl C. Icahn, is engaged in core businesses that include oil & gas, gaming
and real estate. As the result of its stock ownership, AREP will be able to
elect the entire board of directors of WestPoint International.
The terms of the sale, valued at $703.5 million, provide for the issuance of
stock in WestPoint International, Inc. that will own all of the purchased assets
of WestPoint Stevens Inc. through its indirect subsidiary, WestPoint Home, Inc.,
which will be the primary operating entity of the new company. In accordance
with the terms of the purchase agreement, WestPoint Home, Inc. will pay current
trade payables to WestPoint Stevens' vendors in the ordinary course.
The holders of the Company's first lien debt will receive 35% of the common
stock of WestPoint International, Inc. As the holder of 40% of the Company's
first lien debt, a subsidiary of AREP will acquire approximately 14% of the
common stock of WestPoint International, Inc. Pursuant to the sale agreement,
the holders of WestPoint Stevens' first and second lien debt will be given
rights to subscribe for additional shares of common stock representing 47.5% of
the common stock of WestPoint International, Inc. A subsidiary of AREP has
agreed to subscribe to its portion of the rights and will thereby acquire not
less than an additional 19% of the common stock of WestPoint International, Inc.
at a cost of approximately $50 million. AREP has also agreed to subscribe for
any unexercised rights and may acquire up to an additional 27% of the common
stock of WestPoint International, Inc. at a cost of approximately $75 million if
other first and second lien holders exercise none of the rights. Finally, a
subsidiary of AREP made an investment of $187 million in exchange for 17.5% of
the common stock of WestPoint International, Inc. Accordingly, AREP will own up
to 79% of the equity of WestPoint International, Inc., an amount that may reduce
to 51% in the event that the other recipients of the subscription rights
exercise all of their rights.
Following the sale, WestPoint Stevens will wind down its estate, and as a
result, all shares of its common stock will be cancelled with no payment.
Carl C. Icahn, Chairman of the Board of AREP's general partner stated, "We
believe that the home textiles industry remains a large and profitable market in
which WestPoint can create sustainable competitive advantage. WestPoint's assets
- - built over decades of investment - are substantial, including its
manufacturing expertise, capital assets, personnel, brands, distribution skills,
and customer relationships. While others worry about the challenges faced by
industries in change, we see these challenges as presenting the opportunity for
the emergence of a well-capitalized, industry-leading player, especially with a
meaningful infusion of capital from AREP."
M.L. "Chip" Fontenot, President and CEO of WestPoint Stevens commented, "AREP's
investment is an important milestone in WestPoint's transition toward becoming a
more global player in the home textiles industry. New capital invested in our
business will give us the freedom and financial resources to focus with renewed
vigor on growth and the next stage of our transformation."
American Real Estate Partners, L.P., a master limited partnership, is a
diversified holding company engaged in a variety of businesses. AREP's
businesses currently include gaming; oil & gas exploration and production; and
real estate.
WestPoint International Inc. is the nation's premier home fashions consumer
products company, with a wide range of bed linens, towels, blankets, comforters
and accessories marketed under the well-known brand names GRAND PATRICIAN,
PATRICIAN, MARTEX, ATELIER MARTEX, BABY MARTEX, UTICA, STEVENS, LADY PEPPERELL,
SEDUCTION, VELLUX and CHATHAM - all registered trademarks owned by WestPoint
International Inc. and its subsidiaries - and under licensed brands including
CHARISMA, RALPH LAUREN HOME, DISNEY HOME and GLYNDA TURLEY.
This shall not constitute an offer of any securities for sale, which offer may
be made only pursuant to a registration statement filed with the Securities and
Exchange Commission pursuant to the Securities Act of 1933 or an exemption
therefrom. This shall not constitute an offer to sell or the solicitation of an
offer to buy securities in any State in which such offer or solicitation would
be unlawful prior to registration or qualification under the securities law of
any such State.
AREP Safe Harbor Statement: 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 changes in risks related
to our oil and gas exploration and production operations, including costs of
drilling, completing and operating wells and the effects of regulation, risks
related to our casino 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, competition for investment
properties, 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.
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WestPoint Stevens Safe Harbor Statement: Except for historical information
contained herein, certain matters set forth in this press release are
"forward-looking statements" within the meaning of the U.S. Private Securities
Litigation Reform Act of 1995. Such forward-looking statements involve certain
risks and uncertainties that could cause actual results to differ materially
from those in the forward-looking statements. Such risks and uncertainties may
be attributable to important factors that include but are not limited to the
following: Product margins may vary from those projected; Raw material prices
may vary from those assumed; Additional reserves may be required for bad debts,
returns, allowances, governmental compliance costs, or litigation; There may be
changes in the performance of financial markets or fluctuations in foreign
currency exchange rates; Unanticipated natural disasters could have a material
impact upon results of operations; There may be changes in the general economic
conditions that affect customer practices or consumer spending; Competition for
retail and wholesale customers, pricing and transportation of products may vary
from time to time due to seasonal variations or otherwise; Customer preferences
for our products can be affected by competition, or general market demand for
domestic or imported goods or the quantity, quality, price or delivery time of
such goods; There could be an unanticipated loss of a material customer or a
material license; The availability and price of raw materials could be affected
by weather, disease, energy costs or other factors. The information contained in
this release is as of August 8, 2005. WestPoint Stevens assumes no obligation to
update any forward-looking statements contained in this document as a result of
new information or future events or developments.
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