Andrews Group proposes to acquire newly issued Marvel Entertainment Group stock.

NEW YORK--(BUSINESS WIRE)--Nov. 12, 1996--Andrews Group Incorporated today proposed to the Board of Directors of Marvel Entertainment Group, Inc. (NYSE:MRV), an investment by Andrews pursuant to which Andrews would acquire from Marvel, Marvel Common Stock that would represent 80.1% of the outstanding shares of Marvel Common Stock, after giving effect to the acquisition.

The acquisition is conditioned on Toy Biz, Inc. (NYSE:TBZ) becoming a wholly owned subsidiary of Marvel. The purchase price for the shares would be $350 million in cash, or, at the option of Andrews, shares of Class A Common Stock of Toy Biz, or a combination of the foregoing.

A complete text of the Andrews proposal follows:

I am writing to propose, for your consideration, an investment by Andrews Group Incorporated ("Andrews") in Marvel Entertainment Group, Inc. ("Marvel"), pursuant to which Andrews would acquire from Marvel a number of shares of Marvel common stock, par value $.01 per share (the "Marvel Common Stock"), representing 80.1% of the outstanding shares of the Marvel Common Stock after giving effect to the acquisition (the "Andrews Investment"). The purchase price for the shares would be $350 million in cash or, at the option of Andrews, an equal value of shares of Class A common stock, par value $.01 per share (the "Toy Biz Common Stock"), of Toy Biz, Inc. ("Toy Biz"), or a combination of the foregoing.

Any contribution by Andrews to Marvel of shares of Toy Biz Common Stock would be made in the context of Toy Biz becoming a wholly owned subsidiary of Marvel. In that connection, at Andrews' option, all or a portion of the purchase price for Andrews Investment could be paid through the delivery of Toy Biz Common Stock. The shares of Toy Biz Common Stock to be so transferred would be valued on the basis of the cost to Andrews of acquiring Toy Biz Common Stock.

In anticipation of the Andrews Investment and Toy Biz becoming a wholly owned subsidiary of Marvel, Andrews has agreed to purchase all of the Toy Biz Common Stock owned by Isaac Perlmutter and Avi Arad. The consummation of the Andrews Investment is subject to an agreement for the acquisition of Toy Biz having been executed and all conditions to that agreement having been satisfied.

Consummation of the Andrews Investment will require certain consents under and amendments to the Marvel credit agreements. Such consents and amendments would allow Marvel to obtain the additional borrowing capacity under its credit agreements that Marvel requires. Moreover, the Andrews Investment is subject to the satisfactory resolution of a number of issues under the Marvel parent holding company indentures, including that any Marvel Common Stock purchased by Andrews not be subject to the liens thereunder.

Our proposal is, of course, also conditioned upon the execution of a definitive agreement which would contain appropriate representations, warranties, covenants and conditions customary for transactions of this nature. In addition, any definitive agreement would be subject to the approval of Andrews' Board of Directors.

In our view, the Andrews Investment represents a significant opportunity for Marvel and its stockholders. The Andrews Investment would provide Marvel with desperately-needed liquidity and financial flexibility. As such, it is a fundamental predicate to a financial restructuring essential if Marvel is to resolve its current difficulties and have the opportunity, over time, to prosper.

We understand that, in light of overlapping equity ownership between Andrews and Marvel, you have formed a special committee of independent directors (the "Special Committee") to consider the Andrews Investment. Both we and our financial and legal advisors are at your disposal to render whatever assistance or provide any further details with respect to the Andrews Investment that you may require. Moreover, we are all prepared to meet with the Special Committee and its legal and financial advisors at your earliest convenience to review the Andrews Investment and any other aspect of Andrews that may be of interest or assistance.

CONTACT: Lawrence A. Rand 

Kekst and Company, Inc.

[phone]