Neiman Marcus Acquired in $5.1 Billion Deal

The Neiman Marcus Group, Inc. Board of Directors has approved a definitive agreement to sell the Company to an investment group consisting of Texas Pacific Group and Warburg Pincus LLC. Under the terms of the agreement, Texas Pacific Group and Warburg Pincus will acquire all of the outstanding Class A and Class B shares of The Neiman Marcus Group for $100.00 per share in cash, representing a transaction value of approximately $5.1 billion.

Each of the investors will own equal stakes in the company upon completion of the transaction.

Burt Tansky, President and Chief Executive Officer of The Neiman Marcus Group, said, “We are excited to announce this transaction, particularly given the strengths of Texas Pacific Group and Warburg Pincus. They share our interest in the strong future of our company. Our customers, employees, and vendors should know that now, and following the completion of this transaction, it will be business as usual. We believe that our new partners will help us continue to focus on a business plan that is dedicated to luxury leadership, financial discipline, quality, and growth.”

“We are delighted to be partnering with Burt Tansky and the rest of the Neiman Marcus management team. Together, we hope to build on their exceptional track record of performance,” said Jonathan Coslet, partner at TPG.

Warburg Pincus Managing Director Kewsong Lee stated, “We are pleased to have the opportunity to partner with this exceptional management team. Neiman Marcus is the leading luxury retailer, and we believe strongly in the continued growth of the company.”

The Smith family, which owns a significant percentage of the equity of the Company, has entered into a separate agreement to vote its shares in favor of the merger.

Completion of the deal is contingent on regulatory review and approval by the shareholders of The Neiman Marcus Group and is expected to occur by November 1, 2005.

Goldman Sachs acted as financial advisor to The Neiman Marcus Group in connection with the strategic review and this transaction. JP Morgan also acted as financial advisor to the Board of Directors of The Neiman Marcus Group in connection with this transaction.

Simpson Thacher & Bartlett LLP acted as legal advisor to The Neiman Marcus Group.