APN Apeiron Capital Investment Corp

All Cash Offer Superior to Hamilton Beach's Proposed Stock for Stock Merger NEW YORK, Sept. 14 /PRNewswire-FirstCall/ -- Harbinger Capital Partners Master Fund I, Ltd. and Harbinger Capital Partners Special Situations Fund, L.P. (together, "Harbinger"), together the largest shareholder of Applica Incorporated ("Company" or "Applica") (NYSE:APN), with ownership of an aggregate of 9,830,800 shares or approximately 40% of the common stock of the Company, today announced that it has sent a letter to Applica's Board proposing to acquire all outstanding shares of the Company not owned by Harbinger for $6 per share in cash. As detailed in the letter, Harbinger believes this all-cash, fully funded proposal is compelling for all Applica shareholders and represents a superior proposal to Applica's current merger agreement with the Hamilton Beach/Proctor-Silex subsidiary ("Hamilton Beach") of NACCO Industries, Inc. ("NACCO") (NYSE:NC). The offer is conditioned upon, among other things, the Company's termination of its merger agreement with Hamilton Beach in accordance with its terms and without breach by Applica. In the letter, Harbinger says that "We believe our all-cash offer allows Applica's shareholders to realize full value, immediate liquidity and a substantial premium for their shares. In contrast, the value of the Hamilton Beach stock proposed to be issued to Applica's shareholders is highly uncertain in light of the absence of any trading history, what will be a limited public float and its disadvantaged voting rights." The full text of the letter follows: Harbinger Capital Partners Master Fund I, Ltd. Harbinger Capital Partners Special Situations Fund, L.P. September 14, 2006 Board of Directors Applica Incorporated 3633 Flamingo Road Miramar, Florida 33027 Attention: Harry D. Schulman Chairman of the Board Ladies and Gentlemen: Harbinger Capital Partners Master Fund I, Ltd. and Harbinger Capital Partners Special Situations Fund, L.P. (together, "Harbinger") are together the largest shareholder of Applica Incorporated ("Company" or "Applica"), with ownership of an aggregate of 9,830,800 shares or approximately 40.14% of the common stock of the Company. As the largest shareholder of Applica, we are very dissatisfied with the terms of the merger agreement with the Hamilton Beach/Proctor-Silex subsidiary ("Hamilton Beach") of NACCO Industries, Inc. ("NACCO"). The purpose of this letter is to offer a compelling all-cash alternative to the transaction with Hamilton Beach. Based on publicly available information and our knowledge of the Company, we hereby offer to acquire Applica in a transaction in which the Company's shareholders would receive $6.00 in cash for each share of common stock. We believe our all-cash offer allows Applica's shareholders to realize full value, immediate liquidity and a substantial premium for their shares. In contrast, the value of the Hamilton Beach stock proposed to be issued to Applica's shareholders is highly uncertain in light of the absence of any trading history, what will be a limited public float and its disadvantaged voting rights. We have sufficient cash and financing flexibility to fully fund the proposed transaction and our offer is not subject to any financing condition. Our offer represents a 73% premium to the closing price for the Company's common stock on July 21, 2006 (the last trading day prior to the announcement of the Hamilton Beach merger agreement), a 38% premium to the average closing price for the Company's common stock for the period since the announcement of the Hamilton Beach merger on July 24, 2006 through September 13, 2006 (the last trading day prior to our offer) and a 32% premium to the closing price for the Company's common stock on September 13, 2006 (the last trading day prior to our offer). There are numerous reasons for our dissatisfaction with the proposed transaction with Hamilton Beach, including the following: * we believe that economic ownership of only 25% of Hamilton Beach (particularly after taking into account the $110 million of indebtedness proposed to be incurred by Hamilton Beach to finance a dividend for the sole benefit of NACCO) fails to adequately value Applica and the high vote stock reserved for NACCO's stockholders significantly disenfranchises Applica's shareholders, who will have only approximately 6% of the voting power in the combined company; * we believe that Hamilton Beach will be significantly leveraged after the proposed merger, especially in light of the $110 million dividend from Hamilton Beach to NACCO that will be paid for by debt that will burden the combined Hamilton Beach/Applica, and that such leverage will substantially decrease Hamilton Beach's financial and operating flexibility; and * there is no guaranty that Hamilton Beach's management will be able to capture the synergies it expects to be realized in the proposed merger, we are skeptical that any synergies actually realized will materially increase the value of the new company and, in any event, with only 25% ownership of the combined company, Applica's shareholders are not being afforded adequate participation in any upside that might result from the realization of synergies. Accordingly, we believe our offer is a "superior proposal" relative to the proposed transaction with Hamilton Beach. Our offer is conditioned on (i) the termination of the Hamilton Beach merger agreement in accordance with its terms and without breach by Applica, (ii) the execution of a definitive merger agreement with us that is customary for transactions of this type, which we are confident can be accomplished on an expedited basis, (iii) a waiver of the application of the Florida Affiliated Transactions statute to our merger and (iv) limited confirmatory legal due diligence. In addition, we would expect restoration of any of our voting rights that may have been lost as a result of Florida's Control Share Act. We have retained Lazard Freres & Co. LLC as our financial advisor and Paul, Weiss, Rifkind, Wharton & Garrison LLP as our legal advisor and we are prepared to meet immediately with you and the Company's management and advisors in order to answer any questions about our offer and to work out the details of a definitive merger agreement. This letter is not intended to create or constitute any legally binding obligation, liability or commitment by us regarding the proposed transaction, and, other than any confidentiality agreement we may enter into with you, there will be no legally binding contract or agreement between us regarding the proposed transaction unless and until a definitive merger agreement is executed. We look forward to a meeting with you at your earliest convenience. Very truly yours, HARBINGER CAPITAL PARTNERS MASTER FUND I, LTD. By: Harbinger Capital Partners Offshore Manager, L.L.C. By: s/o Philip A. Falcone Title: Senior Managing Director HARBINGER CAPITAL PARTNERS SPECIAL SITUATIONS FUND, L.P. By: Harbinger Capital Partners Special Situations GP, LLC By: s/o Philip A. Falcone Title: Senior Managing Director About Harbinger Capital Partners Harbinger Capital Partners through its investment team located in New York City manages in excess of $4 billion in capital through two complementary strategies. Harbinger Capital Partners Master Fund I, Ltd. is focused on restructurings, liquidations, event-driven situations, turnarounds and capital structure arbitrage, including both long and short positions in highly leveraged and financially distressed companies. Harbinger Capital Partners Special Situations Fund, L.P. is focused on distressed/high yield debt securities, special situation equities and private loans/notes in a predominantly long-only strategy. This press release does not constitute a solicitation of a proxy, for or with respect to the annual meeting or any special meeting of the Company's shareholders. Any such solicitation will be made only pursuant to separate proxy solicitation complying with the requirements of Section 14(a) of the Securities Exchange Act of 1934, as amended. Contacts: Jeremy Fielding/Mark Semer/Micheline Tang Kekst and Company (212) 521 4800 DATASOURCE: Harbinger Capital Partners CONTACT: Jeremy Fielding, or Mark Semer, or Micheline Tang, all of Kekst and Company, +1-212-521-4800

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