Fortress Acquires East Coast Industries For $3.5 Billion

Hedge fund investor Fortress Investment Group LLC has acquired Florida East Coast Industries, Inc. (FECI) for approximately $3.5 billion, according to a press release. The merger agreement was unanimously approved by FECI's Board of Directors. Upon completion of the transaction, FECI will become a privately held company, and its common stock will no longer be publicly traded.

Florida East Coast Industries will pay a special dividend of $21.50 per share in cash and in the merger shareholders will receive $62.50 in cash for each share of FECI common stock they hold. The combined dividend and merger consideration equal $84.00 per share and represent a 13.3% premium to the NYSE closing price of $74.13 on May 7, 2007 and a 31% premium to the average closing price over the last 60 trading days.

Adolfo Henriques, Chairman, President and Chief Executive Officer of FECI, stated, "Our focus has always been about maximizing shareholder value. The value created by this transaction is a direct result of our employees' dedication, commitment and hard work over many years. We look forward to working together with Fortress to continue to build our businesses."

Morgan Stanley acted as financial advisor to FECI and provided an opinion to the Board of Directors of Florida East Coast Industries that the merger consideration is fair to FECI shareholders from a financial point of view. Additional information will be filed with the SEC.

Florida East Coast Industries, Inc., owns, develops, leases and holds in joint ventures, approximately 8.6 million square feet of Class-A office and industrial space primarily in Jacksonville, Orlando and South Florida counties of Palm Beach, Broward and Miami-Dade, as well as an additional 1,916,000 square feet under construction.

Fortress Investment Group LLC is a leading global alternative asset manager with approximately $35.1 billion in assets. Fortress manages private equity funds, hedge funds and publicly traded alternative investment vehicles. The private equity funds total approximately $19.9 billion of the firm's assets under management.