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<SEC-DOCUMENT>0000950123-05-000585.txt : 20050121
<SEC-HEADER>0000950123-05-000585.hdr.sgml : 20050121
<ACCEPTANCE-DATETIME>20050121170050
ACCESSION NUMBER:		0000950123-05-000585
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		2
CONFORMED PERIOD OF REPORT:	20050121
ITEM INFORMATION:		Entry into a Material Definitive Agreement
FILED AS OF DATE:		20050121
DATE AS OF CHANGE:		20050121

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			AMERICAN REAL ESTATE PARTNERS L P
		CENTRAL INDEX KEY:			0000813762
		STANDARD INDUSTRIAL CLASSIFICATION:	OPERATORS OF NONRESIDENTIAL BUILDINGS [6512]
		IRS NUMBER:				133398766
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-09516
		FILM NUMBER:		05542198

	BUSINESS ADDRESS:	
		STREET 1:		100 SOUTH BEDFORD ROAD
		CITY:			MT KISCO
		STATE:			NY
		ZIP:			10549
		BUSINESS PHONE:		9142427700
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>y05003e8vk.txt
<DESCRIPTION>FORM 8-K
<TEXT>
<PAGE>
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

       ------------------------------------------------------------------

                                    FORM 8-K

                                 CURRENT REPORT
                     Pursuant to Section 13 OR 15(d) of the
                         Securities Exchange Act of 1934

       Date of Report (Date of Earliest Event Reported): January 21, 2005

                       AMERICAN REAL ESTATE PARTNERS, L.P.
         ---------------------------------------------------------------
             (Exact name of registrant as specified in its charter)


<TABLE>
<S>                        <C>                          <C>
         DELAWARE                   1-9516                  13-3398766
- -------------------------------------------------------------------------------
     (State or other       (Commission File Number)        (IRS Employer
     jurisdiction of                                    Identification No.)
      incorporation)
</TABLE>

                   100 South Bedford Road, Mt. Kisco, NY 10549
- -------------------------------------------------------------------------------
               (Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: (914) 242-7700

                                       N/A
- --------------------------------------------------------------------------------
          (Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:

[ ]   Written communication pursuant to Rule 425 under the Securities Act (17
      CFR 230.425)

[ ]   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
      CFR 240.14a-12)

[ ]   Pre-commencement communications pursuant to Rule 14d-2(b) under the
      Exchange Act (17 CFR 240.14d-2(b))

[ ]   Pre-commencement communications pursuant to Rule 13e-4(c) under the
      Exchange Act (17 CFR 240.13e-4(c))

<PAGE>
SECTION 8 - OTHER EVENTS

ITEM 8.01 OTHER EVENTS

On January 21, 2005, the Company issued a press release, a copy of which is
filed as Exhibit 99.1.


EXHIBIT INDEX

      99.1  Press Release dated January 21, 2005



      [remainder of page intentionally left blank; signature page follows]
<PAGE>
                                   SIGNATURES

      Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.

                                    AMERICAN REAL ESTATE PARTNERS, L.P.
                                        (Registrant)


                                    By:   American Property Investors, Inc.
                                          General Partner


                                          By:   /s/ John P. Saldarelli
                                                --------------------------------
                                                John P. Saldarelli
                                                Vice President, Chief Financial
                                                Officer, Secretary and Treasurer

Date: January 21, 2005


                                       3

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>2
<FILENAME>y05003exv99w1.txt
<DESCRIPTION>PRESS RELEASE
<TEXT>
<PAGE>
                                                                EXHIBIT 99.1


 CONTACT:   JOHN P. SALDARELLI
            CHIEF FINANCIAL OFFICER, SECRETARY AND TREASURER
            (914) 242-7700


                             FOR IMMEDIATE RELEASE

       AMERICAN REAL ESTATE PARTNERS, L.P. AGREES TO ACQUIRE EQUITY INTERESTS IN
THREE OIL AND GAS COMPANIES AND THE SANDS HOTEL AND CASINO FOR AN AGGREGATE OF
$652 MILLION IN DEPOSITARY UNITS AND CASH.

       AMERICAN REAL ESTATE PARTNERS, L.P. COMMENCES OFFERING OF SENIOR NOTES
DUE 2013.

      Mount Kisco, New York, January 21, 2005 - American Real Estate Partners,
L.P. (NYSE:ACP) ("AREP") announced today that it has entered into agreements to
acquire additional oil and gas and gaming and entertainment assets in
transactions with affiliates of Carl C. Icahn. The aggregate consideration for
the transactions is $652 million, subject to certain purchase price reductions,
of which $180 million is payable in cash and the balance of which is payable by
the issuance of limited partnership depositary units valued at $29 per unit. Mr.
Icahn currently owns indirectly approximately 86.5% of AREP's outstanding
depositary and preferred units and indirectly owns 100% of AREP's general
partner, American Property Investors, Inc. Upon the closing of the transactions,
Mr. Icahn will own approximately 90.1% of AREP's outstanding depositary units
and 86.5% of its preferred units assuming no purchase price reductions. The
transactions were approved by the Audit Committee of AREP's general partner. The
Audit Committee was advised as to the transactions by independent legal counsel
and financial advisors. The Audit Committee obtained fairness opinions that the
consideration to be paid in the transactions was fair, from a financial point of
view, to AREP.

      In the aggregate, the transactions would result in pro forma AREP Adjusted
EBITDA (adjusted for debt restructuring costs, income from discontinued
operations, severance tax refund, unrealized losses on hedge contracts and
provision for obligatory investments) for the twelve month period ended
September 30, 2004 of $335.8 million. Pro forma net earnings for that period
would be $188.5 million.

      The transactions include the acquisition of the membership interest in NEG
Holding LLC other than that already owned by National Energy Group, Inc. (which
is itself 50.01% owned by AREP) and 100% of the equity of each of TransTexas Gas
Corporation and Panaco, Inc., all of which will be consolidated under AREP Oil &
Gas LLC, which is wholly owned by American Real Estate Holdings Limited
Partnership and 41.2% of the common stock of GB Holdings, Inc. and warrants to
purchase, upon the occurrence of certain events, 11.3% of the fully diluted
common stock of its subsidiary, Atlantic Coast Entertainment Holdings, Inc.
("Atlantic Holdings"), which owns 100% of ACE Gaming LLC, the owner and operator
of The Sands Hotel and Casino located in Atlantic City, New Jersey. The closing
of each of the transactions is subject to certain conditions, including the
approval by the depositary unitholders of the issuance of the depositary units
with respect to the transactions for which the consideration is depositary units
and the receipt of the oil and gas reserve reports as of January 21, 2005 for
each of NEG Holding, TransTexas and Panaco.

      Prior to the transactions, each of AREP and Mr. Icahn's affiliated
companies owned oil and gas and gaming and entertainment assets. Upon completion
of these transactions, all such
<PAGE>
assets held by Mr. Icahn's affiliates will have been acquired by AREP. AREP
currently operates in three core businesses: real estate; gaming and
entertainment; and oil and gas. As a result of these transactions, AREP will
have substantially increased its oil and gas holdings, as well as expanded its
gaming and entertainment holdings.

      Management currently estimates that the combined proved reserves of NEG
Holding, TransTexas and Panaco are 357.8 Bcfe and have a PV-l0 value of over $1
billion. The reserves and PV-l0 value have been prepared by internal staff and
have not been reviewed by independent engineers. Reserves prepared by
independent engineers may vary materially from those prepared by internal staff.

      NEG Operating LLC, a wholly-owned subsidiary of NEG Holding, is engaged in
the exploration and production of oil and gas and, at September 30, 2004, owned
interests in approximately 700 wells in Arkansas, Louisiana, Oklahoma and Texas.
TransTexas is engaged in the exploration, production and transmission of oil and
gas, primarily in South Texas, and, at September 30, 2004, owned interests in 55
wells. Panaco is engaged in the exploration and production of oil and gas,
primarily in the Gulf of Mexico and the Gulf Coast Region, and, at September
30,2004, owned interests in 147 wells.

       Before the acquisition of GB Holdings and Atlantic Holdings securities,
AREP owned approximately 36.3% of the outstanding common stock of GB Holdings
and warrants to purchase, upon the occurrence of certain events, approximately
10.0% of the fully diluted common stock of Atlantic Holdings. As a result of the
transactions, AREP will own approximately 77.5% of the common stock of GB
Holdings and warrants to purchase approximately 21.3% of the fully diluted
common stock of Atlantic Holdings. AREP also owns approximately $63.9 million
principal amount, or 96.4%, of the 3% senior notes due 2008 of Atlantic
Holdings, which, upon the occurrence of certain events, are convertible into
approximately 42.1% of the fully diluted common stock of Atlantic Holdings. If
all outstanding Atlantic Holdings notes were converted and warrants exercised,
AREP would own approximately 63.4% of the Atlantic Holdings common stock, GB
Holdings would own approximately 28.8% of the Atlantic Holdings common stock and
the remaining shares would be owned by the public.

       As previously announced, between December 6, 2004 and December 27, 2004,
AREP purchased (i) $27.5 million aggregate principal amount of term notes issued
by TransTexas, which constitutes 100% of the outstanding term notes of
TransTexas, (ii) $38.0 million aggregate principal amount of term loans issued
by Panaco, which constitutes 100% of the outstanding term loans of Panaco and
(iii) $37.0 million aggregate principal amount of the convertible debt issued
by Atlantic Holdings, bringing AREP's ownership of that debt to $63.9 million
principal amount.


                                       2
<PAGE>
      The following table reconciles net earnings to EBITDA, and EBITDA to
Adjusted EBITDA for the twelve months ended September 30, 2004 (in thousands):

<TABLE>
<CAPTION>
                                                       Twelve Months Ended
                                                        September 30, 2004
                                                    ---------------------------
                                                      Actual          Pro Forma
                                                    ---------         ---------
                                                            (unaudited)
<S>                                                 <C>               <C>
Net earnings                                        $ 215,295         $ 188,459
Interest expense                                       35,512            90,504
Income tax (benefit) expense                              685            (8,931)
Depreciation, depletion and
    amortization, including provision
    for obligatory investments                         29,498           113,827
                                                    ---------         ---------
    EBITDA                                            280,990           383,859
Debt restructuring costs                                   --             8,040
Income from discontinued operations                   (72,956)          (72,956)
Severance tax refund                                       --            (4,468)
Unrealized losses on hedge contracts                       --            22,804
Provision for obligatory
    investments                                            --            (1,455)
                                                    ---------         ---------
    ADJUSTED EBITDA                                 $ 208,034         $ 335,824
                                                    =========         =========
</TABLE>


      The cash to be paid in the transactions will be financed through the
anticipated issuance by AREP and its subsidiary, American Real Estate Finance
Corp., of a new issue of senior notes due 2013 in the principal amount of
approximately $300.0 million. However, the closing of the transactions are not
subject to the closing of the offering. The notes to be offered have not been
registered under the Securities Act of 1933 or applicable state securities laws
and may not be offered or sold in the United States absent registration or an
applicable exemption from the registration requirements of the Securities Act of
1933 and applicable state securities laws. This announcement shall not
constitute an offer to sell or the solicitation of an offer to buy the notes.

      American Real Estate Partners, L.P. is a master limited partnership.

      This release contains certain "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995, many of which
are beyond our ability to control or predict. Forward-looking statements may be
identified by words such as "expects," "anticipates," "intends," "plans,"
"believes," "seeks," "estimates," "will" or words of similar meaning and
include, but are not limited to, statements about the expected future business
and financial performance of AREP and its subsidiaries. Among these risks and
uncertainties are changes in general economic conditions, the extent, duration
and strength of any economic recovery, the extent of any tenant bankruptcies and
insolvencies, our ability to maintain tenant occupancy at current levels, our
ability to obtain, at reasonable costs, adequate insurance coverage, risks
related to our hotel and casino operations, including the effect of regulation,
substantial competition, rising operating costs and economic downturns,
competition for investment properties, risks related to our oil and gas
operations, including costs of drilling, completing and operating wells and the
effects of regulation, and other risks and uncertainties

                                       3
<PAGE>
detailed from time to time in our filings with the SEC, including our 2003 Form
10-K, 2004 Form 10-Qs and Form 8-Ks. We undertake no obligation to publicly
update or review any forward-looking information, whether as a result of new
information, future developments or otherwise.


                                       4



</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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