SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. __)
Santa Anita Operating Company
(Name of Issuer)
Common Stock, $0.10 par value
(Title of class of securities)
801212101
(CUSIP Number)
Peter A. Nussbaum, Esq.
Schulte Roth & Zabel LLP
900 Third Avenue
New York, New York 10022
(212) 756-2000
(Name, address and telephone number of person authorized to
receive notices and communications)
November 21, 1996
(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
[ ]. (A fee is not required only if the reporting person: (1)
has a previous statement on file reporting beneficial ownership
of more than five percent of the class of securities described in
Item 1; and (2) has filed no amendment subsequent thereto
reporting beneficial ownership of five percent or less of such
class.) (See Rule 13d-7.)
Note: Six copies of this statement, including all exhibits,
should be filed with the Commission. See Rule 13d-1(a) for other
parties to whom copies are to be sent.
* The remainder of this cover page shall be filled out for a
reporting person's initial filing on this form with respect to
the subject class of securities, and for any subsequent amendment
containing information which would alter disclosures provided in
a prior cover page.
The information required on the remainder of this cover page
shall not be deemed to be "filed" for the purpose of Section 18
of the Securities Exchange Act of 1934 ("Act") or otherwise
subject to the liabilities of that section of the Act but shall
be subject to all other provisions of the Act (however, see the
Notes).
<PAGE>
SCHEDULE 13D
CUSIP No. 801212101 Page 2 of 10 Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Gotham Partners, L.P. 13-3700768
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A (a) [x]
GROUP* (b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
WC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS [ ]
IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)
6 CITIZENSHIP OR PLACE OF ORGANIZATION
New York
NUMBER OF 7 SOLE VOTING POWER
SHARES 580,472
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY EACH 0
9 SOLE DISPOSITIVE POWER
REPORTING 580,472
PERSON
WITH 10 SHARED DISPOSITIVE POWER
0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH
REPORTING PERSON
580,472
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) [ ]
EXCLUDES CERTAIN SHARES*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW
(11)
5.1%
14 TYPE OF REPORTING PERSON*
PN
<PAGE>
SCHEDULE 13D
CUSIP No. 801212101 Page 3 of 10 Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Gotham Partners II, L.P. 13-3863925
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A (a) [x]
GROUP* (b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
WC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS [ ]
IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)
6 CITIZENSHIP OR PLACE OF ORGANIZATION
New York
NUMBER OF 7 SOLE VOTING POWER
SHARES 8,828
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY EACH 0
9 SOLE DISPOSITIVE POWER
REPORTING 8,828
PERSON
WITH 10 SHARED DISPOSITIVE POWER
0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH
REPORTING PERSON
8,828
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) [ ]
EXCLUDES CERTAIN SHARES*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW
(11)
.078%
14 TYPE OF REPORTING PERSON*
PN
<PAGE>
Page 4 of 10 Pages
1. Security and Issuer
This statement on Schedule 13D (the "Statement") relates to the
shares of common stock par value $0.10 per share (the "Shares"), of
Santa Anita Operating Company, a Delaware corporation (the
"Company"). The principal executive offices of the Company are
located at 285-301 West Huntington Drive, Arcadia, CA 91066-6014.
Item 2. Identity and Background
This Statement is being 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"). Each of Gotham and Gotham II was formed to
engage in the buying and selling of securities for investment for its
own account.
Section H Partners, L.P., a New York limited partnership
("Section H"), is the sole general partner of Gotham and Gotham II.
Karenina Corp., a New York corporation ("Karenina"), and DPB Corp., a
New York corporation ("DPB"), are the sole general partners of
Section H. Karenina is wholly owned by Mr. William A. Ackman. DPB
is wholly owned by Mr. David P. Berkowitz. Messrs. Ackman and
Berkowitz are citizens of the United States of America, and their
principal occupation is managing the affairs of Karenina and DPB,
respectively, and through such entities, the affairs of Section H.
Gotham and Gotham II Gotham. The business address of each of Gotham
and Gotham II, Section H, Karenina, DPB and Messrs. Ackman and
Berkowitz is 110 East 42nd Street, 18th Floor, New York, New York
10017.
During the last five years, none of Gotham, Gotham II, Section
H, Karenina, DPB, Mr. Ackman or Berkowitz (i) has been convicted in a
criminal proceeding g(excluding traffic violations or similar
misdemeanors) or (ii) has been a party to a civil proceeding of a
judicial or administrative body of competent jurisdiction and as a
result of such proceeding was or is subject to a judgment, decree or
final order enjoining future violations of, or prohibiting or
mandating activities subject to, federal or state securities laws or
finding any violation with respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration
The aggregate purchase price of the Shares and the shares of
Santa Anita Ralty Enterprises, Inc. (together with the Company, the
"Companies"), which trade together with the Shares (the "Paired
Shares"), purchased by Gotham was $13,054,325 and the aggregate
purchase price of the Shares and the Paired Shares purchased by
Gotham II was $194,717. All of the funds required for these
purchases were obtained form the general funds of Gotham and Gotham
II, respectively.
Item 4. Purpose of the Transaction
The Reporting Persons acquired the Shares for investment
purposes, and the Reporting Persons intend to evaluate the
performance of such securities as an investment in the ordinary
course of business. The Reporting Persons pursue an investment
objective that seeks capital appreciation. In pursuing this
investment objective, the Reporting Persons analyze the operations,
capital structure and markets of companies in which they invest,
including the Company, on a continuous basis through analysis of
documentation and discussions with knowledgeable industry and market
observers and with representatives of such companies (often at the
invitation of management).
Page 5 of 10 Pages
<PAGE>
Based on the Companies' Form 8-K filed with the SEC on August
17, 1996, in which the Companies announced a "strategic alliance"
with Colony Investments II ("Colony"), and the Companies' more
detailed filings and exhibits in its October 24, 1996 Form 8-K, the
Reporting Persons are aware of the details of the Colony transaction.
The Reporting Persons believe that the Colony transaction is not
in the best interests of shareholders, and is dilutive to
shareholders and destructive to shareholder value.
Colony was allowed to purchase 112,700 Shares and Paired Shares
and 867,343 putable paired preferred shares at $12.975, a price
which is significantly below the Companies' net asset value per
share even ignoring the value of the Companies' paired share
structure.
If the transaction is consummated, Colony will purchase newly
issued UPREIT units which are convertible one-for-one into
common shares at a price per common share equivalent of $15.24.
Because Colony is not required to purchase these units before
October 1, 1998, the Company will not have the use of this
capital until the units are purchased. In addition, the
equivalent share price to $15.24 on October 1, 1998 in December
1996 dollars is $11.59, using an equity discount rate of 15%.
Thus, future sales of the Companies' stock to Colony will occur
at prices largely below, on a present value basis, the price
paid by Colony in its $12.975 purchase, and more than 50% below
today's price.
In substance, the transaction though characterized as a
"strategic alliance," is, in the Reporting Persons' view, a sale
of control of the Companies to Colony. Through the sale of
980,043 shares and units at $12.975 and the future sale of the
UPREIT units, Colony will own 45% of the fully diluted common
shares of each of the Companies. Even before Colony puts up
additional capital to purchase UPREIT shares, Colony will assume
de facto control of the Companies because: (1) the president
of the Companies' operating subsidiary limited liability
company, will be Kelvin L. Davis, a Colony appointee, (2) Colony
will have the right to appoint two of five members of the
operating subsidiaries' boards, and three of twelve (to be
reduced to eleven) members of the Companies' boards. Despite
this de facto change of control, Colony is not paying a premium
to the market price of the Companies' shares, but rather is
purchasing them at an enormous discount to market value.
As part of the Colony transaction, Colony will seek to amend the
1995 share award program to allow for option grants equal to
9.5% of the outstanding Shares and Paired Shares calculated as
if the Companies were to assume conversion of all UPREIT units
Colony is obligated to purchase. The issuance of an enormous
number of options will be dilutive to the exiting shareholders
of the Companies.
Despite the statement by the Company in a press release dated
August 19, 1996, that Colony will "contribute its proved
acquisition and real estate expertise, as well as its
exceptional access to deal flow" to the Companies, the details
of the transaction documents reveal that Colony will receive
"Completion Fees" in amounts to be determined with respect to
every acquisition that the Companies complete in addition to
reimbursement of all of Colony's expenses associated with their
involvement with the Companies.
In summary, because of the above features of the Colony proposal, the
Reporting Persons intend to vote against the Colony transaction.
Page 6 of 10 Pages
<PAGE>
Based on an October 9, 1996 press release issued by Koll Arcadia
Investors, LLC ("KAI") and a copy of Koll's letter to the Companies
dated October 9, 1996 filed as Exhibit 99.1 to the Companies' October
24, 1996 8-K, the Reporting Persons are aware of the basic elements
of the KAI proposal.
As currently proposed, the KAI proposal appears substantially
superior to the Colony proposal. In particular, the transaction
appears to confer control to a new investor group at a significantly
higher valuation, offers shareholders $14 per share in cash in a
substantially tax-free special dividend, and gives shareholders the
opportunity to participate in future transactions through non-
dilutive rights offerings.
The Reporting Persons encourage management to consider carefully
the KAI proposal and to avoid spending the Companies' capital on the
Colony transaction as currently proposed for it is destructive to
shareholder value.
The Reporting Persons may contact Colony and/or KAI to discuss
ways in which they can improve their respective proposals. The
reporting Persons may also contact management, other potential
investors, as well as consider other alternatives to the existing
Colony and KAI proposals.
Each Reporting Person will continuously assess the Company's
business, financial condition, results of operations and prospects,
general economic conditions, the securities markets in general and
those for the Company's securities in particular, other developments
and other investment opportunities. Depending on such assessments,
one or more of the Reporting Persons may acquire additional Shares
and Paired Shares or may determine to sell or otherwise dispose of
all or some of its holdings of Shares and Paired Shares. Such
actions will depend upon a variety of factors, including, without
limitation, current and anticipated future trading prices for such
common stock, the financial condition, results of operations and
prospects of the Companies, alternative investment opportunities, and
general economic financial market and industry conditions.
Except as set forth above, none of the Reporting Persons has any
plans or proposals which would relate to or result in any of the
matters set forth in items (a) through (j) of Item 4 of Schedule 13D.
Item 5. Interest in Securities of the Issuer
(a) Gotham owns 580,472 Shares as of the date of this
Statement, representing an aggregate of approximately 5.1% of the
outstanding Shares of the Company. Gotham II owns 8,828 Shares as of
the date of this Statement, representing an aggregate of
approximately .078% of the outstanding shares of the Company. The
percentages used in this paragraph are calculated based upon
11,385,200 outstanding Shares of the Company, as of November 5, 1996,
as reported in the Company's Form 10-Q for the quarter ended
September 30, 1996. None of Section H, Karenina, DPB, Mr. Ackman or
Mr. Berkowitz beneficially own any Shares (other than the Shares
beneficially owned by Gotham and Gotham II).
(b) Each of Gotham and Gotham II has sole power to vote and to
dispose of all of the Shares beneficially owned by it.
(c) The table below sets forth information with respect to all
purchases and sales of Shares by Gotham and Gotham II (the prices
represent the price for a unit consisting of one Share and one Paired
Share). In each case, the transactions were affected in open-market
transactions on the NASDAQ.
<PAGE>
Page 7 of 10 Pages
Gotham
Date Number of Units Price per Unit
Purchased/ (Sold)
10/09/96 57,400 $20.35380
10/17/96 106,900 20.05660
10/18/96 82,216 20.06210
10/21/96 26,585 20.06000
10/22/96 20,775 20.06000
10/25/96 3,150 19.62640
10/31/96 19,690 21.34810
11/11/96 34,000 25.97210
11/12/96 14,275 26.33590
11/13/96 18,708 25.51000
11/14/95 17,723 25.54680
11/15/96 4,135 25.49750
11/18/96 15,655 25.44370
11/19/96 19,890 25.04020
11/20/96 72,370 24.67860
11/21/96 49,230 25.04900
11/25/96 2,070 24.40520
11/26/96 15,700 25.46840
Gotham II
Date Number of Units Price per Unit
Purchased/ (Sold)
10/09/96 1,100 $20.35380
10/17/96 2,000 20.05660
10/18/96 1,284 20.06210
10/21/96 415 20.06000
10/22/96 325 20.06000
10/25/96 50 19.62640
10/31/96 310 21.34810
11/12/96 225 26.33590
11/13/96 292 25.51000
11/14/95 277 25.54680
11/15/96 65 25.49750
11/18/96 245 25.44370
11/19/96 310 25.04020
11/20/96 1,130 24.67860
11/21/96 770 25.04900
11/25/96 30 24.40520
Except as described above, none of Gotham, Gotham II, Section H,
Karenina, DPB, Mr. Ackman or Mr. Berkowitz has effected any
transactions in the securities of the Company during the past sixty
days.
(d) and (e). Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with
Respect to Securities of the Issuer.
None of Gotham, Gotham II, Section H, Karenina, DPB, Mr. Ackman
or Mr. Berkowitz is a party to any contract, arrangement,
understanding or relationship with respect to any securities of the
Company, including but not limited to transfer or voting of any of
the securities, finder's fees, joint ventures, loan
<PAGE>
Page 8 of 10 Pages
or option agreements, puts or calls, guarantees of profits, divisions
of profit or losses or the giving or withholding of proxies.
Item 7. Material to be Filed as Exhibits
The following exhibit is being filed with this Schedule:
Exhibit 1 A written agreement relating to filing of joint
acquisition statements as required by Rule 13d-1(f)(1) promulgated
under the Securities Exchange Act of 1934, as amended.
After reasonable inquiry and to the best of our knowledge and
belief, the undersigned certify that the information set forth in
this statement is true, complete and correct.
December 2, 1996
GOTHAM PARTNERS, L.P.
By: Section H Partners, L.P.
its general partner
By: KARENINA CORP.,
a general partner
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.
<PAGE>
Page 9 of 10 Pages
By: /s/ David P. Berkowitz
David P. Berkowitz
President
EXHIBIT 1
JOINT ACQUISITION STATEMENT
PURSUANT TO RULE 13d-1(c) 1
The undersigned acknowledge and agree that the foregoing
statement on Schedule 13D, as amended, is filed on behalf of each
of the undersigned and that all subsequent amendments to this
statement on Schedule 13D, as amended, shall be filed on behalf
of each of the undersigned without the necessity of filing
additional joint acquisition statements. The undersigned
acknowledge that each shall be responsible for the timely filing
of such amendments, and for the completeness and accuracy of the
information concerning him or it contained therein, but shall not
be responsible for the completeness and accuracy of the
information concerning the other, except to the extent that he or
it knows or has reason to believe that such information is
inaccurate.
DATED: December 2, 1996
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.
<PAGE>
Page 10 of 10 Pages
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
