SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. )
Santa Anita Realty Enterprises, Inc.
(Name of Issuer)
Common Stock, $0.10 par value
(Title of class of securities)
801209206
(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. 801209206 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)
5.05%
14 TYPE OF REPORTING PERSON*
PN
<PAGE>
SCHEDULE 13D
CUSIP No. 801209206 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)
.08%
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 Realty
Enterprises, Inc., 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 Kareniha and DPB,
respectively, and through such entities the affairs of Section H, Gotham and
Gotham II. 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 (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
Operating Company (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 on 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
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
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 5.05% 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 .08% of the outstanding Shares of
the Company. The percentages used in this paragraph are calculated based upon
11,497,700 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 effected in open-market transactions on the NASDAQ.
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 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 the 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(f)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.
By: /s/ William A. Ackman
William A. Ackman
President
<PAGE>
Page 10 of 10 Pages
By: DPB CORPORATION,
a general partner of Section H Partners, L.P.
By: /s/ David P. Berkowitz
David P. Berkowitz
President
