Prime Hospitality
Corp. announced today that it had commenced a cash tender offer to
purchase any and all of its outstanding 8-3/8% Senior Subordinated Notes
due 2012 (the “Notes”) (CUSIP No. 741917AJ7), as well as a related consent
solicitation to amend the Notes and the indenture pursuant to which they
were issued. The tender offer and consent solicitation are being conducted
in connection with Prime Hospitality’s previously announced agreement to
merge with an affiliate of The Blackstone Group.
The consent solicitation will expire at 5:00 p.m., New York City time, on
Wednesday, September 22, 2004, unless extended or amended by the Company.
Tendered Notes may not be withdrawn and consents may not be revoked after
the consent expiration date. The tender offer will expire at 8:00 a.m.,
New York City time, on Friday, October 8, 2004, unless extended or earlier
terminated by the Company.

Holders tendering their Notes will be required to consent to proposed
amendments to the Notes and to the indenture governing the Notes, which
will eliminate substantially all of the restrictive covenants and certain
events of default, amend the merger and consolidation covenant and make
changes to the defeasance provisions. Holders may not tender their Notes
without also delivering consents or deliver consents without also
tendering their Notes.

The total consideration to be paid for each $1,000 principal amount of
Notes will be a price equal to the present value, as of the payment date
for such Notes purchased in the tender offer, of the earliest redemption
price for such Notes ($1,041.88) and interest that would accrue on such
Notes from the payment date up to, but not including the earliest
redemption date (May 1, 2007), calculated based on (A) the yield to
maturity on the 4.375% U.S. Treasury Note due May 15, 2007, as calculated
by Banc of America Securities LLC in accordance with standard market
practice, based on the bid price of such reference security as of 2:00
p.m., New York City time, on the tenth business day immediately preceding
the Tender Offer Expiration Date, as displayed on Bloomberg Government
Pricing Monitor on “Page PX5” or any recognized quotation source selected
by Banc of America Securities LLC in its sole discretion, plus (B) 50
basis points. Holders whose Notes are accepted for payment will also be
paid accrued and unpaid interest up to, but not including the date of
payment for the Notes. The total consideration includes a consent payment
of $30.00 per $1,000 principal amount of the Notes which will be payable
only in respect of the Notes purchased that are tendered on or prior to
the consent expiration date. Holders who tender their Notes after the
consent expiration date will not be entitled to receive the consent
payment.

The tender offer and consent solicitation are made upon the terms and
conditions set forth in the Offer to Purchase and Consent Solicitation
Statement, dated September 9, 2004 and the related Consent and Letter of
Transmittal. The tender offer and consent solicitation are subject to the
satisfaction of certain conditions, including receipt of consents
sufficient to approve the proposed amendments and the merger having
occurred or occurring substantially concurrent with the tender offer
expiration date. The purpose of the tender offer is to acquire all
outstanding Notes in connection with the merger. The purpose of the
consent solicitation is to, among other things, amend the Notes and the
indenture governing the Notes to eliminate substantially all of the
restrictive covenants and certain events of default, amend the merger and
consolidation covenant and make changes to the defeasance provisions (and
make related changes in the Notes).

Prime Hospitality has retained Banc of America Securities LLC and Bear,
Stearns & Co. Inc. to act as the Dealer Managers for the tender offer and
Solicitation Agents for the consent solicitation. Banc of America
Securities LLC can be contacted at (888) 292-0070 (toll free) and (704)
388-9217 and Bear, Stearns & Co. Inc. can be contacted at (877) 696-BEAR
(toll free). The tender offer and consent solicitation documents are
expected to be distributed to holders beginning today. Requests for
documentation may be directed to D.F. King & Co., Inc., the Information
Agent, which can be contacted at (212) 269- 5550 (for banks and brokers
only) and (800) 628-8532 (for all others toll free).
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