-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, TZPVNKdCdUhZMEV2TMIoAzqoI8XkmRtO3SChhNNyJ2bMlWW7AGY0P8H6hhGrgH6H YF/Rz+0llkSb7wy7d9eYvg== 0000898822-97-000073.txt : 19970130 0000898822-97-000073.hdr.sgml : 19970130 ACCESSION NUMBER: 0000898822-97-000073 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 19970129 SROS: NYSE SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: SANTA ANITA REALTY ENTERPRISES INC CENTRAL INDEX KEY: 0000314661 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-RACING, INCLUDING TRACK OPERATION [7948] IRS NUMBER: 953520818 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-32774 FILM NUMBER: 97513698 BUSINESS ADDRESS: STREET 1: 301 W HUNTINGTON DR STREET 2: STE 405 CITY: ARCADIA STATE: CA ZIP: 91007 BUSINESS PHONE: 8185745550 MAIL ADDRESS: STREET 1: 301 W HUNTINGTON DR STREET 2: STE 405 CITY: ARCADIA STATE: CA ZIP: 91007 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: GOTHAM PARTNERS LP /NY/ CENTRAL INDEX KEY: 0000899983 STANDARD INDUSTRIAL CLASSIFICATION: [] FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 237 PARK AVENUE 9TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10017 SC 13D/A 1 SCHEDULE 13D AMENDMENT NO. 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 (Amendment No. 1) Santa Anita Realty Enterprises, Inc. Santa Anita Operating Company (Name of Issuer) Common Stock, $0.10 par value (Title of class of securities) 801209206 801212101 (CUSIP Number) William A. Ackman Gotham Partners 110 East 42nd Street New York, New York 10017 (212) 286-0300 (Name, address and telephone number of person authorized to receive notices and communications) January 28, 1997 (Date of event which requires filing of this statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this Schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ]. Check the following box if a fee is being paid with the statement [ ]. Page 1 of 3 Pages This Amendment No. 1 is filed by Gotham Partners, L.P., a New York limited partnership ("Gotham"), and Gotham Partners II, L.P., a New York limited partnership ("Gotham II" and together with Gotham, the "Reporting Persons"), and amends and supplements the following Items of those certain Schedule 13Ds (the "Schedule 13Ds") originally filed on November 21, 1996, in each case by adding the information set forth below. Capi- talized terms used herein without definition shall have the meanings ascribed thereto in the Schedule 13Ds. ITEM 4. PURPOSE OF TRANSACTION. On January 28, 1997, KAI proposed a recapitalization transaction (the "Recapitalization") relating to the Companies which is more fully described in an amendment to KAI's report on Schedule 13D filed with the Securities and Exchange Commission on January 29, 1997. In the Recapitalization, as proposed by KAI, the Companies would (i) pay a special cash dividend of $11 per Paired Share to all current stockholders of the Companies, and (ii) commence a self-tender to purchase up to 5.6 million Paired Shares (the "Self-Tender") in which current stockholders of the Companies will have the option in addition to the payment of the $11 special dividend to (x) retain their existing Paired Shares, (y) receive $16 in cash per Paired Share, or (z) receive per Paired Share an additional $11 in cash together with one warrant to purchase one Paired Share at $16.25 per Paired Share for a five year period (the "Warrant"). It is not expected that the Reporting Persons would tender any Paired Shares into the Self-Tender. On January 28, 1997, KAI entered into a letter agreement (the "Letter Agreement") with Gotham relating to the Recapitalization pursuant to which the Reporting Persons would, subject to the terms and conditions in such Letter Agreement, purchase on a standby basis up to 5.6 million Warrants from the Companies at $5.00 per Warrant, subject to certain adjustments as contained in the Letter Agreement, or up to $28 million in the aggregate. A copy of the Letter Agreement is attached hereto as Exhibit 1 and is specifically incorporated herein by reference. The description herein of the Letter Agreement is qualified in its entirety by reference thereto. ITEM 7. MATERIAL TO BE FILED AS EXHIBITS. The following Exhibits are filed as part of this Schedule 13D: (1) Letter Agreement, dated January 28, 1997 between KAI and the Reporting Persons. Page 2 of 3 Pages SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete, and correct. January 29, 1997 GOTHAM PARTNERS, L.P. By: SECTION H PARTNERS, L.P. its general partner By: KARENINA CORPORATION a general partner of Section H Partners, L.P. By: /s/ William A. Ackman William A. Ackman President By: DPB CORPORATION a general partner of Section H Partners, L.P. By: /s/ David P. Berkowitz David P. Berkowitz President GOTHAM PARTNERS II, L.P. By: SECTION H PARTNERS, L.P. its general partner By: KARENINA CORPORATION a general partner of Section H Partners, L.P. By: /s/ William A. Ackman William A. Ackman President By: DPB CORPORATION a general partner of Section H Partners, L.P. By: /s/ David P. Berkowitz David P. Berkowitz President Page 3 of 3 Pages EX-99 2 EXHIBIT 1 EXHIBIT 1 APOLLO REAL ESTATE ADVISORS, L.P. 38TH FLOOR 1301 AVENUE OF THE AMERICAS NEW YORK, NEW YORK 10019 January 28, 1997 Mr. William A. Ackman Gotham Partners, L.P. 110 East 42nd Street, 18th Floor New York, New York 10017 Dear Bill: The attached outlines our understanding of the terms of Gotham's participation in a transaction involving Santa Anita Operating Company and Santa Anita Realty Enterprises, Inc. If the attached is accurate and acceptable to you, please indi- cate by signing below and returning a copy to us, whereupon we will have, subject to the terms and conditions set forth therein, a binding agreement. Sincerely, Apollo Real Estate Advisors, L.P. By: /s/ William A. Scully William A. Scully Agreed and Accepted GOTHAM PARTNERS, L.P. By: SECTION H PARTNERS, L.P. its general partner By: KARENINA CORPORATION a general partner of Section H Partners, L.P. By: /s/ William A. Ackman William A. Ackman President Standby Commitment to Purchase Warrants Summary Term Sheet Buyer: Gotham Partners, L.P. and/or Gotham Partners II, L.P. or existing or to be formed affiliates controlled by William A. Ackman and David P. Berkowitz ("Buyer"). Issuer: The Santa Anita Operating Co. and Santa Anita Realty, together Santa Anita Companies, any successor entity or entities ("SAR" or "the Companies"), upon the consummation of a recapitalization transaction relating to SAR which may be proposed by Koll Arcadia Investors, LLC or any affiliate ("KAI") to SAR (the "Trans- action"). Purpose: KAI and Buyer wish to enter into an agreement whereby Buyer acts as a standby purchaser for the warrants to be issued by SAR as part of the Transaction. In the Transaction, (i) SAR will pay a special cash dividend of $11 per share to all current stockholders, (ii) SAR would commence a self-tender in which current SAR stockholders will have the option (after the payment of the $11 special dividend) to either (x) receive an additional $11 in cash plus one warrant as described below, or (y) receive $16 in cash. For each SAR share with respect to which the $16 cash election is made, Buyer would purchase one warrant. Amount: Maximum of 5.6 million warrants (total Warrant issue). Purchase Price: $5.00 per Warrant. (Maximum of $28 million before payment of fees to Buyer.) Term: 5 years from closing of Standby Purchase. Additional Equity Investment in Certain Circumstances: In the event (x) the total purchase price of warrants to be acquired by Buyer less (y) the Standby Fee and the aggregate Take Up Fee (such difference, the "Net Equity Investment") is less than $20 million, then Buyer shall be afforded the opportunity to co-invest with KAI and its affiliates in the equity of SAR and/or the operating partnership/ LLC on the same economic basis as KAI and its affiliates and for a total investment by Buyer in such equity of $20 million less the Net Equity Investment; provided, however, that Buyer shall not have the right to acquire more than 15% of the equity investment of KAI and its affiliates and co-investors (including any pre-existing equity investment of KAI and such affiliates and co-investors in SAR securities that is not converted to cash in the Transaction). (It is understood and agreed that the equity as to which such percentage is calculated shall include KAI's and its affiliates' existing equity investment in SAR, and any monies paid by KAI or affiliates in respect of common stock, preferred stock, partnership or LLC interests, any similar equity or equity-linked securities, and any warrants to purchase any such securities.) Strike Price: $16.25, subject to adjustment as described below. Take Up Fee: $.40 per warrant for each warrant that Buyer purchases as standby purchaser. American/European: Warrants shall be American style, exercisable at any time (subject to mutually agreed structures to preserve SAR's REIT status) after the closing of the standby purchase. Standby Fee: Buyer to receive $2,000,000 standby fee for providing standby commitment through open tender period, payable at the termination of the open tender period. Dividend Strike Price Adjustment: In the event that SAR at any time pays any dividends or any other distributions (including a special or liquidating dividend, but excluding the special cash dividend paid in the Transaction), the strike price of the warrants will be adjusted downward (but not below zero) on the ex- dividend date by the amount of each dividend or other distribution; provided that prior to the record date for any dividend or distribution that would not result in a full adjustment Buyer shall be given at least 30 days advance notice. Maximum Dividend Strike Price Adjustment: In the event effective control of the Companies is at any time sold to a "user" (unaffiliated with Apollo or Koll) in a one-time transaction, strike price adjustments for dividends (excluding special or liquidating dividends) shall thereafter be limited to a maximum overall reduction (including any prior and all future reductions) of $5.00 per share (or such higher overall level as may already have been obtained); provided -2- that prior to the record date for any dividend or distribution that would not result in a full adjustment Buyer shall be given at least 30 days advance notice. Anti-dilution: The warrants will include customary anti-dilution provisions, including, but not limited to, stock splits, stock dividends, and other similar capitalization transactions. Issuance of Additional Equity: In the event SAR proposes to issue any new Common Stock (or any securities convertible or ex- changeable into Common Stock or pursuant to which Common Stock may be acquired) ("New Equity"), Buyer shall have the right to purchase a proportion of such New Equity such that Buyer maintains its interest in the Company on a fully diluted basis as determined as of the closing of the Standby Purchase (or at such higher level as might thereafter exist as a result of any re- capitalization or repurchase (but not as a result of any open-market purchases by Buyer)). Buyer will not be required to pay any underwriting discounts, commissions, etc. with re- spect to any such New Equity. Rights Offerings: In the event SAR does a rights offering, Buyer will receive rights such that Buyer will have the op- portunity to maintain its interest in the Company on a fully diluted basis as determined as of the closing of the Standby Purchase (or at such higher level as might thereafter exist as a result of any recapitalization or repurchase (but not as a result of any open-market purchases by Buyer)). Registration Rights: SAR will, upon Buyer's request, at SAR's own expense (for expenses customarily borne by the issuer), and subject to customary blackout periods, cause to become and remain effective a shelf registration statement, with respect to the warrants and common shares issued or issuable upon exercise of warrants, and will also, at Buyer's request but at SAR's expense (for expenses customarily borne by the issuer), effect up to 3 demand registrations with respect to such securities. Piggyback Registration: Buyer and its transferees will in addition have customary piggyback registration rights. Limitation on Warrant Exercise: Warrants are immediately exercisable subject to mutually agreed restrictions to preserve SAR's REIT -3- status. Buyer will receive rights similar to those provided to Colony Capital in the Amended and Restated Formation Agreement of October 24, 1996 to allow Buyer to register and sell warrants or shares without violating related party tenant and other REIT regulations. Transferability: Warrants shall be freely transferable upon closing of the tender, subject to restrictions to preserve SAR's REIT status. Exchangeability: Warrants and/or common stock owned by Buyer shall be freely (subject to mutually agreed provisions to preserve SAR's REIT status) exchange- able with the UPREIT partnership for warrants to purchase UPREIT Units and/or UPREIT Units (and such warrants and Units shall themselves be freely exchangeable for warrants to purchase common stock and/or common stock); the UPREIT Units shall also be freely convertible into REIT shares; all subject to mutually agreed restrictions to preserve SAR's REIT status. Other Protections: Buyer shall receive other customary protections against modifications of Warrants which would adversely affect Buyer's economic and other rights, e.g., protections in the event of certain "merge out" transactions, etc. Corporate Governance, Etc.: Buyer will receive board repre- sentation on SAR board and operating partnership/LLC board, rights with respect to specified affiliate transactions, and customary tag-along rights. Break Up Fees: Buyer will receive 15% of any break- up or similar fees actually received by KAI or any of its affiliates in connection with the proposed Transac- tion or otherwise in connection with any transaction involving SAR, and will also be entitled to reimbursement of its reasonable expenses in any circumstance in which the expenses of KAI or any of its affiliates are reimbursed. Other Customary Provisions: The warrants and the agreement by which Buyer commits to invest will contain other customary provisions. Conditions: The successful consummation of the Transaction on the terms previously disclosed to Buyer and otherwise reasonably satisfactory to Buyer and its counsel; other customary conditions for transactions of this nature. -4- Expenses: KAI and Buyer will share all reasonable expenses incurred by either in connection with the proposed Transaction or in any other transaction in which Buyer participates as contemplated hereby in the ratio of 85/15. Alternative Transaction: In the event the proposed Transaction is not effected, but KAI or its affiliates otherwise participate in any transaction involving SAR or receive any cash, securities or other opportunity in connection with any such transaction, Buyer will: (i) have the right to participate in any equity investment made by KAI or any of its affiliates or co-investors at the following levels (and, with respect to whatever various classes or types of equity are acquired by KAI or any of its affiliates, on a pro rata basis with the equity acquired by KAI or any of its affiliates): first $25 million - 12% next $25 million - 15.5% amounts in excess of $50 million - 19% and (ii) be entitled to receive 12% of any fees or other amounts payable to or received by KAI or any affiliates or co-investors (whether cash, property, securities or otherwise) in connection with any such trans- action, and to participate at the same 12% level in any transaction or opportunity not involving the payment of money or the purchase of property or securities (any of which shall be governed by paragraph (i) above). -5- -----END PRIVACY-ENHANCED MESSAGE-----