-----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, AwsADgbsnW++g1S9PnHh4A/NhygOGfxARC9U6Yw18XmKf4JRdFgr31t70ACsb2UD KDfxzW072xxqbXeMDXHbqg== 0001032462-98-000018.txt : 19980422 0001032462-98-000018.hdr.sgml : 19980422 ACCESSION NUMBER: 0001032462-98-000018 CONFORMED SUBMISSION TYPE: SC 14D1/A PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 19980421 SROS: NYSE SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: DIVALL INSURED INCOME PROPERTIES 2 LIMITED PARTNERSHIP CENTRAL INDEX KEY: 0000825788 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 391606834 STATE OF INCORPORATION: WI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 14D1/A SEC ACT: SEC FILE NUMBER: 005-53823 FILM NUMBER: 98598139 BUSINESS ADDRESS: STREET 1: 101 W 11TH STREET STE 1110 CITY: KANSAS CITY STATE: MO ZIP: 64105 BUSINESS PHONE: 6088292992 MAIL ADDRESS: STREET 1: 101 WEST 11TH ST STREET 2: STE 1110 CITY: KANSAS CITY STATE: MO ZIP: 64105 FORMER COMPANY: FORMER CONFORMED NAME: DIVALL INSURED INCOME FUND-2 LIMITED PARTNERSHIP DATE OF NAME CHANGE: 19880229 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: U S RESTAURANT PROPERTIES INC CENTRAL INDEX KEY: 0001032462 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 752687420 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 14D1/A BUSINESS ADDRESS: STREET 1: 5310 HARVEST HILL ROAD STREET 2: SUITE 270 LB168 CITY: DALLAS STATE: TX ZIP: 75230 BUSINESS PHONE: 9723871487 MAIL ADDRESS: STREET 1: 5310 HARVEST HILL ROAD STREET 2: SUITE 270 CITY: DALLAS STATE: TX ZIP: 75230 SC 14D1/A 1 ================================================================================ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ----------------- SCHEDULE 14D-1/A Tender Offer Statement Pursuant to Section 14(d)(1) of the Securities Exchange Act of 1934 (AMENDMENT NO. 1) DIVALL INSURED INCOME PROPERTIES 2 LIMITED PARTNERSHIP (Name of Subject Company) U.S. RESTAURANT PROPERTIES, INC. (Bidder) Limited Partnership Interests (Title of Class of Securities) 255016107 (CUSIP Number of Class of Securities) ROBERT J. STETSON U.S. RESTAURANT PROPERTIES, INC. 5310 HARVEST HILL ROAD SUITE 270 DALLAS, TEXAS 75230 (972) 387-1487 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications on Behalf of Bidder) COPIES TO: KENNETH L. BETTS WINSTEAD SECHREST & MINICK P.C. 1201 ELM STREET SUITE 5400 DALLAS, TEXAS 75270 (214) 745-5400 CALCULATION OF FILING FEE ================================================================================ Transaction valuation Amount of filing fee - -------------------------------------------------------------------------------- $9,237,488 $1,848* ================================================================================ |_| Check box if any part of the fee is offset as provided by Rule 0-11(a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. Amount Previously Paid: Not applicable. Filing Party: Not applicable. Form or Registration No.: Not applicable. Date Filed: Not applicable. ================================================================================ *Previously paid This Amendment No. 1 to the Tender Offer Statement on Schedule 14D-1 (the "Schedule 14D-1"), initially filed on March 27, 1998, relates to the offer by U.S. Restaurant Properties, Inc., a Maryland corporation (the "Bidder"), to purchase up to 49.9% of the limited partnership interests (the "Interests"), of Divall Insured Income Properties 2 Limited Partnership, a Wisconsin limited partnership (the "Partnership"), at a purchase price of $400 per Interest, net to the seller in cash, upon the terms and subject to the conditions set forth in the Bidder's Offer to Purchase dated March 27, 1998 (the "Offer to Purchase") and in the related Letter of Transmittal (which, as amended from time to time, together with the Offer to Purchase, constitutes the "Offer"), copies of which were attached to the Schedule 14D-1 as Exhibits (a)(1) and (a)(2) respectively. ITEM 10. ADDITIONAL INFORMATION On March 30, 1998, the Partnership, through its general partner The Provo Group, Inc., an Illinois corporation (the "General Partner"), filed a Solicitation/Recommendation Statement on Schedule 14D-9 relating to the Offer with the Securities and Exchange Commission, in which the General Partner recommended to the Partnership's limited partners (the "Limited Partners") that they reject the Offer and not tender their Interests pursuant to the Offer. Attached as an Exhibit to the Schedule 14D-9 was a letter to the Limited Partners dated March 31, 1998. A letter to the Limited Partners from the Bidder with respect to the foregoing is filed as Exhibit (a)(5) to the Schedule 14D-1 and is incorporated herein by reference. ITEM 11. MATERIAL TO BE FILED AS EXHIBITS Item 11 is hereby amended and supplemented by adding the following Exhibit: (a)(5) Form of Response Letter, dated April 21, 1998, sent to Interest Holders. - 2 - SIGNATURE After due 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. Dated: April 21, 1998 U.S. RESTAURANT PROPERTIES, INC. By: /s/ Robert J. Stetson ------------------------------- Robert J. Stetson Chief Executive Officer and President - 3 - EXHIBIT (a)(5) FORM OF RESPONSE LETTER April 21, 1998 Re: DiVall Insured Income Fund 2 L.P. (the "Partnership") Offer of U.S. Restaurant Properties, Inc. Dear Limited Partner: By now, you should have received an Offer to Purchase dated March 27, 1998 from U.S. Restaurant Properties, Inc. (NYSE:USV) in which we are offering to purchase units of the Partnership at a price of $400 each. In addition, you may have also received a letter dated March 31, 1998 from your General Partner, urging you to reject USV's Tender Offer. While we certainly do not want to get into a "mud slinging" contest, we believe your General Partner's letter contains certain inaccuracies which should be addressed. Consider the following: IS YOUR GENERAL PARTNER TELLING YOU THE WHOLE STORY? In his letter to the Limited Partners, Mr. Provo describes USV as attempting to "cheaply and cleverly" acquire your Partnership's properties by making a Tender Offer for your Partnership's units. According to Mr. Provo, the proper course of action would have USV submitting a bid to buy the properties from the Partnership. Unfortunately, Mr. Provo fails to mention that in January of this year, USV DID present a bid to Mr. Provo to buy your Partnership's properties at an aggregate price of $21,494,600. In response to USV's January 1998 purchase offer for the properties, your General Partner informed USV the PARTNERSHIP WAS NOT FOR SALE. Now, two months later, your General Partner says the PARTNERSHIP IS FOR SALE, and competitive bids for the properties should be entertained. if your General Partner felt USV's January offer of the properties was low, why didn't he begin negotiations? Furthermore, why didn't your General Partner inform the Limited Partners that an offer for the properties had even been made? DID YOUR PARTNERSHIP UNITS REALLY INCREASE IN VALUE IN 1997? Your General Partner stated your Partnership units are worth approximately $500 each. One year ago, your General Partner stated in the Partnership's 1996 Annual Report your Partnership units were worth approximately $470 each. It is difficult for us to understand how your Partnership units could have increased in value over the past year by 6%, when the Net Operating Income of the Partnership DECREASED in 1997 by approximately 8%. We also cannot fathom how the value of the Partnership's units could have increased since three of the Partnership's Hardee's restaurants were sold during 1997 and sales proceeds distributed to the Limited Partners. Finally, does this new General Partner value take into the consideration the anticipated return of capital distribution of $45 per unit from the sale of the Partnership's two Florida Denny's restaurants? The Partnership's primary assets are the restaurant properties. If properties are sold, and sales proceeds paid out to the Partners, it seems logical to expect the residual value of the Partnership units to decrease proportionately. IS USV TRYING TO "LOWBALL" YOU? USV's Tender Offer price was derived utilizing a methodology which assumed the sale of all the properties at today's real estate values, followed by the liquidation of the Partnership. We estimated a value for the Properties based upon their actual cash flow as reported in the Partnership's financial statements. The portfolio value was adjusted to reflect the sale of any properties during the year. This method for valuing property portfolios is widely used and accepted through the entire real estate industry. Over the past two years, USV has acquired over $300 million worth of restaurant properties utilizing the same property valuation techniques employed for the DiVall Tender Offer. These properties were purchased in a competitive real estate environment in numerous transactions negotiated with a variety of sellers. If USV was in the habit of making "lowball" offers for real estate properties, we could not have been nearly as successful in acquiring new properties over the past 24 months. It is clear from our recent history that USV IS VERY WILLING TO OFFER FAIR PRICES FOR GOOD ASSETS. WHY IS USV TENDERING FOR MY PARTNERSHIP UNITS? USV is making a Tender Offer for Partnership units as a direct result of The Provo Group's unwillingness to present our purchase offer for the properties to the Limited Partners. We believe that Limited Partners should be allowed to make their own decisions with respect to their investments. MAKE AN INFORMED DECISION ABOUT YOUR INVESTMENT! We are familiar with the history of your Partnership. Given all the difficulties you have endured as Limited Partners in this Partnership, you have every reason to be wary of any offers made relative to your investments. In spite of any misgivings you might have, we urge you to simply review the terms of USV's Tender Offer. We strongly disagree with your General Partner's assessment that USV's Tender Offer price for units is inadequate. As the old adage states, "There are two sides to every story". Call your General Partner and call us to hear what both sides have to say about USV's Tender Offer. We are not the corporate "monsters" that your General Partner would lead you to believe. We have owned, managed and leased restaurant properties since 1986, and believe we know what restaurant properties are worth. Call us. Bob Coleman will be happy to take your call at (800) 449-8435. You will not receive high pressure tactics, only answers to your questions. Sincerely, Robert J. Stetson, President U.S. Restaurant Properties, Inc. -----END PRIVACY-ENHANCED MESSAGE-----