-----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, AB+Gz3TkXiAlHXbNMqhFVaf8y+9Eg6NL4dULX9yfeJjxmqbpTO2S1KBz6vKvVV47 UBUrLN9VdkX4Mj6tKowMog== 0000950148-97-000456.txt : 19970225 0000950148-97-000456.hdr.sgml : 19970225 ACCESSION NUMBER: 0000950148-97-000456 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970213 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19970224 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: FALCON CLASSIC CABLE INCOME PROPERTIES LP CENTRAL INDEX KEY: 0000846811 STANDARD INDUSTRIAL CLASSIFICATION: CABLE & OTHER PAY TELEVISION SERVICES [4841] IRS NUMBER: 954200409 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-18266 FILM NUMBER: 97541979 BUSINESS ADDRESS: STREET 1: 10990 WILSHIRE BLVD 15TH FL CITY: LOS ANGELES STATE: CA ZIP: 90024 BUSINESS PHONE: 3108249990 8-K 1 FORM 8-K 1 ================================================================================ 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: February 13, 1997 (Date of earliest event reported) FALCON CLASSIC CABLE INCOME PROPERTIES, L.P., A CALIFORNIA LIMITED PARTNERSHIP (Exact name of registrant as specified in its charter) CALIFORNIA COMMISSION FILE: 95-4200409 (State or other jurisdiction 0-18266 (I.R.S. Employer of incorporation or identification No.) organization) 10900 WILSHIRE BOULEVARD, 15TH FLOOR LOS ANGELES, CALIFORNIA 90024 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES, INCLUDING ZIP CODE) (310) 824-9990 (Registrant's phone number, including area code) ================================================================================ 2 ITEM 5. OTHER EVENTS On or about February 6, 1997, Everest Cable Investors, LLC disseminated a letter stating its interest in acquiring up to 3,522 units of limited partnership interests in Falcon Classic Cable Income Properties, L.P. (the "Registrant") for a price of $300 per unit, less certain transaction costs. This offer was made without the consent or involvement of the Registrant's General Partner. The General Partner has considered this offer, concluded that it is inadequate and, accordingly, recommended that limited partners not accept the offer. Pursuant to Rule 14e-2 promulgated under the Securities Exchange Act of 1934, as amended, this recommendation and the General Partner's bases therefor were conveyed to limited partners in a letter dated February 13, 1997 which is filed as an exhibit hereto and incorporated herein by this reference. ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS (c) Exhibits 5.1 Letter to Limited Partners dated February 13, 1997. * * * * 2 3 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. FALCON CLASSIC CABLE INCOME PROPERTIES, L.P. a California limited partnership By: Falcon Classic Cable Investors, L.P. General Partner By: Falcon Holding Group, L.P. General Partner By: Falcon Holding Group, Inc. General Partner Date: February 13, 1997. By: /s/ Michael K. Menerey -------------------------------------- Michael K. Menerey Chief Financial Officer 4
Sequentially Numbered Exhibit Description Page ------- ----------------- ------------ 5.1 Letter to Limited 5 Partners dated February 13, 1997
4 EX-5.1 2 EXHIBIT 5.1 1 (Falcon Classic Letterhead) February 13, 1997 Dear Limited Partner: Falcon Classic Cable Income Properties, L.P. (the "Partnership") has become aware that an unsolicited offer for up to 3,522 units (representing approximately 4.9% of the outstanding Units in the Partnership), at a price of $300 per Unit, was commenced by Everest in a letter dated February 6, 1997. This offer was made without the consent or the involvement of the General Partner. We have considered this offer, and believe that it is inadequate and not in your best interest to accept. Accordingly, the General Partner's recommendation is that you reject the Everest offer. We urge you not to sign the Agreement of Transfer Form that Everest sent to you and not tender your Units to Everest. In evaluating the offer, the General Partner believes that its limited partners should consider the following information: o The Partnership was formed on May 15, 1989 to acquire or construct, own and operate cable television systems. The offering price for each limited partnership unit during the offering period was $1,000 per unit. Cash distributions of $328 to $412 per unit were paid from formation through April 15, 1994, at which time distributions were terminated to preserve cash resources. In contrast, Everest's offer is only $300 per unit. If Everest is successful in buying Units at the price in its offer, Everest will own units at much lower prices than virtually all of the current partners and, in our view, for much less than they are worth as discussed below. Limited partners should note that the Partnership's cash flow (operating income before depreciation and amortization and certain partnership expenses) for the twelve months ended December 31, 1996 was approximately $155 per Unit. The Everest offer represents a valuation of less than 4 times said cash flow (after adjustment for the Partnership's "Net Liabilities" as of December 31, 1996, as discussed below). o As previously described in a Form 8-K, dated August 27, 1996, filed by the Partnership with the Securities and Exchange Commission, the Partnership initiated the "Appraisal Process" provided for in its Partnership Agreement. Further, on February 13, 1997, the Partnership filed an additional Form 8-K announcing the results of the appraisals. Based upon the aggregate of the median appraisals of the Partnership's cable systems of $82 million (the "Aggregate Appraised Valuation") and assuming a hypothetical liquidation of the Partnership on December 31, 1996 involving the sale of those systems on that date for an amount equal to the aggregate Appraised Valuation, the estimated cash distribution to unitholders would have been approximately $851.00 per limited partnership unit (the "Hypothetical Estimated Per Unit Distribution") (based upon 71,879 units outstanding). The Hypothetical Estimated Per Unit Distribution was calculated assuming net liabilities on the balance sheet of the Partnership, excluding property, plant and equipment and intangible assets ("Net Liabilities"), of approximately $20.2 million (as of December 31, 1996). The Hypothetical Estimated Per Unit Distribution assumes that the Net Liabilities as of December 31, 1996 represent the only payments, other than certain reserved expenses, that would have been required to be made by the Partnership prior to the distribution of cash to the unitholders. This assumption will likely prove to be invalid. Specifically, this method assumes all of the cable systems are sold in a single transaction. If the Partnership sells the assets over time in separate transactions, for example, it could incur significant transaction costs and there would be a significant delay in the distribution of funds to limited partners. Accordingly, the Hypothetical Estimated Per Unit Distribution is presented for illustrative purposes only and does not necessarily represent amounts the Partnership could have distributed to unitholders on December 31, 1996 or any date thereafter. In the event any of the Partnership's cable systems are sold, the timing and amount of any related distribution to partners cannot be predicted at this time. 5 2 o Based on the information received by the General Partner, the $300 per Unit offer by Everest is less than the price for which units were recently sold on the secondary market. Partnership Spectrum, an independent industry publication, has reported that between November 1, 1996 and December 31, 1996, 105 Units were sold on the secondary market between a high of $429.00 per Unit and a low of $378.00 per Unit. In the General Partner's opinion, the fact that the Everest offer is being made at a discount from the most recent secondary market price available to the General Partner only serves to underscore the inadequacy of the Everest offer. In addition, the General Partner believes that the price for units in the secondary market is not an accurate reflection of the fair market value of such Units due to the low volume of transactions in that limited market and the legal and tax restrictions on such transfers. For the reasons discussed above, the General Partner believes that Everest offer is not in the best interest of the limited partners. The General Partner recommends that you NOT transfer, agree to transfer, or tender any Units in response to Everest's offer. If you have any questions regarding these matters or your investment, please call our Investor Services Department at (800) 433-4287. We would be pleased to provide you with copies of the Forms 8-K referred to in this letter. We will, of course, keep you informed of significant events as they develop. We appreciate the continued support and interest of our Unitholders. Sincerely, Falcon Classic Cable Income Properties, L.P. A California Limited Partnership cc: Account Representative 6 -----END PRIVACY-ENHANCED MESSAGE-----