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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 14D-9
SOLICITATION/RECOMMENDATION STATEMENT PURSUANT TO SECTION 14(D)(4)
OF THE SECURITIES EXCHANGE ACT OF 1934
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(AMENDMENT NO. 1)
CARLYLE REAL ESTATE LIMITED
PARTNERSHIP-VII
(NAME OF SUBJECT COMPANY)
CARLYLE REAL ESTATE LIMITED
PARTNERSHIP-VII
(NAME OF PERSON FILING STATEMENT)
LIMITED PARTNERSHIP INTERESTS
(TITLE OF CLASS OF SECURITIES)
143099307
(CUSIP NUMBERS OF CLASSES OF SECURITIES)
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GARY NICKELE
JMB REALTY CORPORATION
900 NORTH MICHIGAN AVENUE
CHICAGO, ILLINOIS 60611
(312) 440-4800
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO RECEIVE NOTICES AND
COMMUNICATIONS ON BEHALF OF THE PERSON(S) FILING STATEMENT)
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This Amendment amends and supplements the Solicitation/Recommendation
Statement on Schedule 14D-9 (the "Statement") filed by Carlyle Real Estate
Limited Partnership-VII (the "Partnership") on August 11, 1998. Unless
otherwise indicated, capitalized terms used herein have the same meanings as
set forth in the originally filed Statement.
ITEM 2. TENDER OFFER OF THE BIDDER
Item 2 of the Statement is amended to add the following information:
On August 31, 1998 and September 2, 1998, the Purchasers, by Amendment
No. 1 and Amendment No. 2, respectively, to the Purchasers' Schedule 14d-1
dated July 31, 1998, amended the Offer (as so amended, the "Amended Offer")
to increase the purchase price to $37.50 per Interest, net to the seller in
cash, without interest, upon the terms and conditions set forth in the
Amended Offer, and to extend the expiration date under the Amended Offer to
12:00 midnight, Pacific Standard time, on September 30, 1998, unless
further extended.
ITEM 4. THE SOLICITATION OR RECOMMENDATION
Item 4 of the Statement is amended to add the following information:
Following the Partnership's receipt of the Amended Offer, the Special
Committee of the Board of Directors of JMB met to review and consider the
Amended Offer. Based on its analysis, including consideration of the
factors discussed below, the Special Committee has determined that the
Amended Offer is inadequate and not in the best interests of
Interestholders. Accordingly, the Partnership recommends that
Interestholders reject the Amended Offer and not tender their Interests
pursuant to the Amended Offer.
The Special Committee concluded that, in view of the fact that the
Partnership has sold all of its interests in real estate and is in
liquidation and that its assets are primarily cash or cash equivalents, it
would not be meaningful or cost-effective to have a financial advisor
prepare a current valuation of the Partnership's business and assets or the
value of an Interest or to express an opinion with regard to the adequacy
of the Amended Offer. Accordingly, a financial advisor was not requested to
render, and has not rendered, any such valuation or opinion in connection
with the Amended Offer. The Special Committee reached its conclusions with
respect to the Amended Offer after considering a variety of factors,
including, but not limited to, the following:
(i) On April 8, 1998, the Partnership sold its sole remaining real
property interest. The Partnership expects to make a final liquidating
distribution in December 1998. Based upon its estimate of the likely
expense of winding down its affairs, the Partnership expects to make a
distribution to Interestholders of between approximately $40 to $80 per
Interest in December 1998. For the high end of the range for the
estimated final liquidating distribution, it is assumed that there are
no claims made for breach of the representations, warranties and
covenants made by the Partnership in connection with the sale of its
sole remaining real property interest. The Partnership currently does
not expect there to be any claims made for a breach of such
representations, warranties and covenants and therefore expects the
final liquidating distribution to be near the high end of the range for
the distribution.
(ii) The Purchasers are making the Amended Offer with a view to
making a profit. Accordingly, there is a conflict of interest between
their desire to purchase the Interests at a low price and
Interestholders' desire to obtain the maximum cash return for their
Interests.
(iii) The Partnership believes that the Interests are an illiquid
investment whose full value generally can only be realized by an
Interestholder who retains his or her Interests through the liquidation
of the Partnership. In this regard, the Partnership has sold its sole
remaining real property interest and, pursuant to Section 17.2 of the
Partnership Agreement, is dissolved. Under section 18.1 of the
Partnership Agreement, JMB, as the Corporate General Partner, is
required to wind up the affairs of the Partnership, subject to the
discretion of the Corporate General Partner to determine the time,
manner and terms of the sale of any Partnership property (e.g.,
securities investments) and the right of
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the Corporate General Partner, pursuant to Section 18.2 of the
Partnership Agreement, to set up such reserves as it may deem
reasonably necessary for any contingent or unforeseen liabilities or
obligations of the Partnership. It is expected that the Partnership
will complete its liquidation and wind up its affairs during 1998. In
such event, 1998 would be the last year for which an Interestholder
would receive a Form K-1 from the Partnership.
(iv) The Amended Offer price of $37.50 per Interest is between
approximately 47% and 94% of the high and low ends of the range of the
amount that the Partnership expects to distribute to Interestholders in
December 1998.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS
Item 9 of the Statement is amended to add the following exhibit:
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<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
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<C> <S> <C>
(a)(2) Letter, dated September 14, 1998 from the Partnership to its
Interestholders.
</TABLE>
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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.
Carlyle Real Estate
LimitedPartnership--VII
By:
JMB Realty Corporation
Corporate General Partner of
the Partnership
/s/ Judd D. Malkin
By: _________________________________
Name: Judd D. Malkin
Title: Chairman
Dated: September 14, 1998
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EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT PAGE
NUMBER DESCRIPTION NO.
------- ----------- -------
<C> <S> <C>
(a)(2) Letter, dated September 14, 1998 from the Partnership to its
Interestholders.
</TABLE>
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CARLYLE REAL ESTATE LIMITED PARTNERSHIP--VII
900 NORTH MICHIGAN AVENUE
CHICAGO, ILLINOIS 60611
(312) 440-4800
September 14, 1998
Dear Interestholders:
A group (the "Purchasers") that includes affiliates of MacKenzie Patterson,
Inc. has amended its tender offer (the "Amended Offer") for all of the
outstanding limited partnership interests (the "Interests") in Carlyle Real
Estate Limited Partnership--VII (the "Partnership") to increase the purchase
price to $37.50 per Interest and to extend the expiration date to September
30, 1998.
The Board of Directors of JMB Realty Corporation ("JMB"), the Corporate
General Partner of the Partnership, has formed a special committee (the
"Special Committee") consisting of certain Directors of JMB to consider and
respond to offers for Interests that may be received, including the Amended
Offer. THE SPECIAL COMMITTEE HAS DETERMINED THAT THE AMENDED OFFER IS
INADEQUATE AND NOT IN THE BEST INTERESTS OF INTERESTHOLDERS. ACCORDINGLY, THE
PARTNERSHIP RECOMMENDS THAT INTERESTHOLDERS REJECT THE AMENDED OFFER AND NOT
TENDER THEIR INTERESTS.
The Special Committee recommends that you consider the following, together
with the information in the Amendment No. 1 to the Partnership's Schedule 14D-
9 accompanying this letter, in connection with the Amended Offer:
. On April 8, 1998, the Partnership sold its sole remaining real property
interest. The Partnership expects to make a final liquidating
distribution in December 1998 of between approximately $40 to $80 per
Interest, based upon its estimate of the likely expense of winding down
the Partnership's affairs. For the high end of the range for the
estimated final liquidating distribution, it is assumed that there are no
claims made for breach of the representations, warranties and covenants
made by the Partnership in connection with the sale of its sole remaining
real property interest. The Partnership currently does not expect there
to be any claims made for a breach of such representations, warranties
and covenants and therefore expects the final liquidating distribution to
be near the high end of the range for the distribution. IF YOU SELL YOUR
INTERESTS PURSUANT TO THE AMENDED OFFER, YOU WILL NOT RECEIVE THE BENEFIT
OF THIS DISTRIBUTION.
. The Amended Offer price of $37.50 per Interest is between approximately
47% and 94% of the high and low ends of the range of the amount that the
Partnership expects to distribute to Interestholders in December 1998.
. The Purchasers have acknowledged that through August 31, 1998 (the
original expiration date for the tender offer) only 33 Interests had been
tendered to the Purchasers and not withdrawn.
If you have tendered your Interests pursuant to the Amended Offer, you may
wish to withdraw your Interests by complying with the requirements of Section
4 of the Offer to Purchase, as amended to date. If you wish to retain your
Interests and have not already tendered them pursuant to the Amended Offer,
you need not take any action. You should consult with your personal tax
advisor and financial consultant prior to accepting any offer and tendering
your Interests.
On behalf of the Special Committee.
Very truly yours,
Carlyle Real Estate Limited
Partnership--VII
By: JMB Realty Corporation
Corporate General Partner
LOGO
By:
Judd D. Malkin, Chairman
