Prime Hospitality Enters Into Memorandum of Understanding to Settle Stockholder Litigation

Prime Hospitality Enters Into Memorandum of Understanding to
Settle Stockholder Litigation 


FAIRFIELD, N.J., Sept. 24  /PRNewswire-FirstCall/ -- Prime Hospitality Corp.
(the "Company") announced today that the Company and the other defendants have
entered into a memorandum of understanding to settle the purported class action
litigation brought in connection with the Company's acquisition by BREP IV
Hotels Holding L.L.C., an affiliate of The Blackstone Group ("Blackstone"). 
The litigation was brought in the Court of Chancery of the State of Delaware,
New Castle County, against the Company, the Company's directors and Blackstone.

The settlement will not affect the amount of merger consideration to be paid in
the merger or any other terms of the merger.

In connection with the settlement, the Company has agreed to make certain
additional disclosures to its stockholders, which will be included in a proxy
statement supplement that will be mailed to stockholders of the Company.
Subject to the completion of certain confirmatory discovery by counsel to the
plaintiffs, the memorandum of understanding contemplates that the parties will
enter into a settlement agreement.  The settlement agreement will be subject to
customary conditions including court approval following notice to the
stockholders of the Company and consummation of the merger.  In the event that
the parties enter into a settlement agreement, a hearing will be scheduled at
which the court will consider the fairness, reasonableness and adequacy of the
settlement which, if finally approved by the court, will resolve all of the
claims that were or could have been brought in the actions being settled,
including all claims relating to the merger, the merger agreement and any
disclosure made in connection therewith.

The defendants deny the allegations made in the purported class action
litigation and have agreed to settle the litigation to avoid the burden and
expense of further litigation and to avoid the risk of delaying the merger.

About Prime Hospitality Corp.

Prime Hospitality Corp., one of the nation's premiere lodging companies, owns,
manages, develops and franchises more than 250 hotels throughout North America.
 The Company owns and operates three proprietary brands, AmeriSuites(R) (all
suites), PRIME Hotels & Resorts(R) (full-service) and Wellesley Inns &
Suites(R) (limited service). Also within Prime's portfolio are owned and/or
managed hotels operated under franchise agreements with national hotel chains
including Hilton, Sheraton, Hampton, and Holiday Inn. Prime can be accessed
over the Internet at http://www.primehospitality.com/.

About The Blackstone Group

The Blackstone Group, a private investment firm with offices in New York,
London and Hamburg, was founded in 1985.  Blackstone's Real Estate Group has
raised five funds, representing over $6 billion in total equity, and has a long
track record of investing in hotels and other commercial properties.  In
addition to Real Estate, The Blackstone Group's core businesses include,
Private Equity, Corporate Debt Investing, Marketable Alternative Asset
Management, Mergers and Acquisitions Advisory, and Restructuring and
Reorganization Advisory.  The Blackstone Group can be accessed on the Internet
at http://www.blackstone.com/.

Certain statements and information included in this press release constitute
"forward-looking statements" within the meaning of the Federal Private
Securities Litigation Reform Act of 1995.  Such forward-looking statements
involve known and unknown risks, uncertainties and other factors which may
cause the actual results, performance, or achievements of the Company to be
materially different from any future results, performance or achievements
expressed or implied in such forward-looking statements. Additional discussion
of factors that could cause actual results to differ materially from
management's projections, forecasts, estimates and expectations is contained in
the Company's SEC filings.

In connection with the proposed merger, the Company has filed a proxy statement
with the Securities and Exchange Commission.  INVESTORS AND SECURITY HOLDERS
ARE ADVISED TO READ THE PROXY STATEMENT BECAUSE IT CONTAINS IMPORTANT
INFORMATION.  Investors and security holders may obtain a free copy of the
proxy statement and other documents filed by the Company at the Securities and
Exchange Commission's website at http://www.sec.gov/.  The proxy statement and
such other documents may also be obtained for free from the Company by
directing such request to the Company, Attention: Investor Relations, 690 Route
46 East, Fairfield, New Jersey 07004, with a copy to the attention of the
Company's Secretary and General Counsel, Joseph B. Bernardino, Esq., or by
telephone at [phone].

The Company and its directors, executive officers and other members of its
management and employees may be deemed to be participants in the solicitation
of proxies from its shareholders in connection with the proposed merger.
Information concerning the interests of Company's participants in the
solicitation is set forth in the Company's proxy statements and Annual Reports
on Form 10-K, previously filed with the Securities and Exchange Commission, and
in the proxy statement relating to the merger. 

DATASOURCE: Prime Hospitality Corp.



CONTACT:  Rich Szymankski, Prime Hospitality Corp., [phone]; or

John Ford, The Blackstone Group, [phone]



Web site:  http://www.primehospitality.com/

http://www.blackstone.com/ 

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