N@N

Large Preferred Stockholder of Newcastle Investment Corp. Calls Proposed Preferred Stock Offer Inadequate and Unfair

^{Published on 2009-11-06 15:06:24 - Market Wire}
 

NASHVILLE, TN--(Marketwire - November 6, 2009) - Southern Strategic Partners, L.P. ("SSP"), a significant preferred stockholder of Newcastle Investment Corp. ("Newcastle") (NYSE: [ NCT ]) (NYSE: [ NCT.PrB ]) (NYSE: [ NCT.PrC ]) (NYSE: [ NCT.PrD ]), today announced it believes Newcastle's proposed tender offer and amendments to the rights of Newcastle's preferred stock are inadequate and unfair. SSP principal Hugh Entrekin said that SSP does not at this time plan to vote for the amendment or to tender its shares. Mr. Entrekin commented, "While we could be supportive of a restructuring of Newcastle, we cannot support the current proposal because it fails to recognize the preferred stock's priority position in the capital structure and does not offer preferred stockholders common stock or warrants to purchase common stock as part of the tender." SSP (along with its affiliates) owns almost 7% of the Series B preferred shares outstanding and over 8% of the Series D preferred shares outstanding.

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. Mr. Entrekin explained, "The offered price per share represents too large a discount given the Company's greatly improved liquidity position and cash flows."

SSP believes that Newcastle's proposal, if approved, would gut the preferred stock terms and by deregistering the preferred stock from the current listings on the New York Stock Exchange, the non-tendered preferred shares would be essentially worthless. Mr. Entrekin commented, "The proposed tender is at a grossly inadequate price and fails to recognize the superior position of the preferred shares relative to the common shares." SSP believes that the proposed exchange offer and amendments are grossly inadequate and potentially coercive and that preferred stockholders would be giving up too much potential value by accepting the offer.

Mr. Entrekin concluded, "We cannot support the current proposal as the price is inadequate. In addition, the proposal also does not allow the preferred stockholders to exchange their shares for common stock at a meaningful, and significantly higher, price. Lastly, the current offer does not include any change in management's compensation to reflect the company's reduced capital position or provide new incentives to management tied to operating cash flows, dividends and common share price with payment to be made in the form of common shares or options."