Prime Retail Reports Merger Objections

Prime Retail Inc., Baltimore, has announced that two shareholders who own nearly a third of the company's series A preferred stock have objected to the proposed allocation of consideration in connection with a pending merger.The objections came in separate communications from Merrill Lynch & Co. Inc., which owns 511,572 (approximately 22%) of the preferred shares, and Fortress Investment Trust II, which owns 230,000 (approximately 10%) of the shares, according to Prime Retail. The companies maintained that the proposed allocation of $16.25 per share of series A preferred stock is inadequate, Prime Retail said. Prime Retail, a real estate investment trust, previously announced a merger agreement with an affiliate of The Lightstone Group LLC. The merger requires an affirmative vote of the holders of two-thirds of the outstanding series A preferred stock, the holders of two-thirds of outstanding series B preferred stock, and the holders of a majority of the REIT's common stock. Prime Retail said it plans to engage in discussions with Merrill Lynch and Fortress concerning the proposed allocation. The REIT can be found online at http://www.primeretail.com.