SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
Santa Anita Realty Enterprises, Inc.
Santa Anita Operating Company
(Name of Issuer)
Common Stock
(Titles of Classes of Securities)
801209206
801212101
(CUSIP Numbers)
W. Edward Scheetz
c/o Apollo Real Estate Advisors, L.P.
1301 Avenue of the Americas
New York, New York 10019
Telephone: (212) 261-4000
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
With a copy to:
Patrick J. Foye, Esq.
Skadden, Arps, Slate, Meagher & Flom
919 Third Avenue
New York, NY 10022
Telephone: (212) 735-2274
October 14, 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 statement 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: [X]
SCHEDULE 13D
CUSIP No. Page 2 of 14 Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
APOLLO REAL ESTATE INVESTMENT FUND II, L.P.
- -----------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X|
(b) |_|
- -----------------------------------------------------------------------------
3 SEC USE ONLY
- -----------------------------------------------------------------------------
4 SOURCE OF FUNDS
AF
- -----------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) |_|
- -----------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- -----------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY
OWNED BY ---------------------------------------------------
EACH 8 SHARED VOTING POWER
REPORTING 807,000
PERSON ---------------------------------------------------
WITH 9 SOLE DISPOSITIVE POWER
0
---------------------------------------------------
10 SHARED DISPOSITIVE POWER
807,000
- -----------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
807,000
- -----------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES |X|
(Disclaims ownership of 1,000 Paired Shares owned by
Koll Arcadia LLC.)
- -----------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
7.09% of Realty; 7.16% of Operating
- -----------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
PN
- -----------------------------------------------------------------------------
SCHEDULE 13D
CUSIP No. Page 3 of 14 Pages
- -----------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
APOLLO REAL ESTATE ADVISORS II, L.P.
- ------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X|
(b) |_|
- ------------------------------------------------------------------------------
3 SEC USE ONLY
- ------------------------------------------------------------------------------
4 SOURCE OF FUNDS
WC, OO
- ------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) |_|
- ------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- ------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY ----------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 807,000
REPORTING ----------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH 0
----------------------------------------------------
10 SHARED DISPOSITIVE POWER
807,000
- ------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
807,000
- ------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES |X|
(Disclaims ownership of 1,000 Paired Shares owned by
Koll Arcadia LLC.)
- ------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
7.09% of Realty; 7.16% of Operating
- ------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
PN
- ------------------------------------------------------------------------------
SCHEDULE 13D
CUSIP No. Page 4 of 14 Pages
- ------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
KOLL ARCADIA INVESTORS, LLC
- ------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X|
(b) |_|
- ------------------------------------------------------------------------------
3 SEC USE ONLY
- ------------------------------------------------------------------------------
4 SOURCE OF FUNDS
AF
- ------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) |_|
- ------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- ------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY ----------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 807,000
REPORTING ----------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH 0
----------------------------------------------------
10 SHARED DISPOSITIVE POWER
807,000
- ------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
807,000
- ------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES |X|
(Disclaims ownership of 1,000 Paired Shares owned by
Koll Arcadia LLC.)
- ------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
7.09% of Realty; 7.16% of Operating
- ------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
OO
- ------------------------------------------------------------------------------
SCHEDULE 13D
CUSIP No. Page 5 of 14 Pages
- ------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
KOLL ARCADIA LLC
- ------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X|
(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
Delaware
- ------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 1,000
BENEFICIALLY ----------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 807,000
REPORTING ----------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH 1,000
----------------------------------------------------
10 SHARED DISPOSITIVE POWER
807,000
- ------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
808,000
- ------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
- ------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
7.10% of Realty; 7.17% of Operating
- ------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
OO
- ------------------------------------------------------------------------------
This Schedule 13D is being filed by Apollo Real Estate
Investment Fund II, L.P., Apollo Real Estate Advisors II, L.P., Koll
Arcadia Investors, LLC and Koll Arcadia LLC with respect to the Common
Stock, par value $0.10 per share of Santa Anita Realty Enterprises, Inc., a
Delaware corporation ("Realty"), and Common Stock, par value $0.10 per
share of Santa Anita Operating Company, a Delaware corporation ("Operating"
and together with Realty the "Companies").
Item 1. Security and Issuer.
This statement relates to the Common Stock of the Companies
(together, the "Paired Shares"). The principal executive offices of the
Companies are located at 285-301 West Huntington Drive, Arcadia, CA
91066-6014.
Item 2. Identity and Background.
(a)-(c), (f). This statement is being filed jointly by
Apollo Real Estate Investment Fund II, L.P. ("AREIF II"), a limited
partnership organized under the laws of Delaware, Apollo Real Estate
Advisors II, L.P. ("AREA II"), a limited partnership organized under the
laws of Delaware, Koll Arcadia Investors, LLC ("KAI"), a limited liability
company organized under the laws of Delaware and Koll Arcadia LLC
("Koll"), a Delaware limited liability company. AREIF II and AREA II are
sometimes collectively referred to herein as "Apollo", together with KAI
and Koll, the "Reporting Persons".
AREIF II is principally engaged in the business of
investment in real estate-related interests. The address of AREIF II's
principal executive office and principal business is c/o Apollo Real Estate
Advisors II, L.P., Two Manhattanville Road, Purchase, New York 10577.
AREA II is the managing general partner of AREIF II. AREA II
is principally engaged in the business of serving as managing general
partner of AREIF II. The address of AREA II's principal executive office
and principal business is c/o Apollo Real Estate Advisors II, L.P., Two
Manhattanville Road, Purchase, New York 10577.
The sole general partner of AREA II is Apollo Real Estate
Capital Advisors II, Inc., a Delaware corporation ("Capital Advisors II").
Capital Advisors II is principally engaged in the business of serving as
general partner of AREA II.
KAI was formed for the purpose of effecting the transaction
described in Item 4. The address of KAI's principal executive office and
principal business is 4343 Von Karman Avenue, Newport Beach, California
91066.
The members of KAI are Koll Arcadia LLC ("Koll"), a Delaware
limited liability company, and Apollo Arcadia LLC, a Delaware limited
liability company ("AA"). Koll is principally engaged in the business of
managing KAI. The address of Koll's principal executive office and
principal business is 4343 Von Karman Avenue, Newport Beach, California
91066. The other member, AA, is principally engaged in the business of
managing KAI. The address of AA's principal executive office and principal
business is Two Manhattanville Road, Purchase, New York 10577.
Information attached hereto as Schedule 1 is information
concerning the general partners of Apollo, the executive officers and
directors of Capital Advisors II and the members of Koll and certain other
entities, which information is required to be disclosed in response to Item
2 and general instruction C to Schedule 13D. Each of such persons is a
citizen of the United States. All such persons on Appendix A disclaim
beneficial ownership of and any pecuniary interest in the Paired Shares
beneficially owned by the Reporting Persons. The information in this
Schedule 13D with respect to AREIF II, AREA II, Capital Advisors II and AA
has been furnished by AREA II. The information in this Schedule 13D with
respect to KAI and Koll has been furnished by Koll.
(d) and (e). Neither AREIF II, AREA II, Capital Advisors II,
KAI, Koll or AA, nor, to the best of these entities knowledge, any of the
individual's named in Schedule I hereto has during the last five years (i)
been convicted in a criminal proceeding (excluding traffic violations or
similar misdemeanors) or (ii) 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 activities subject to,
federal or state securities laws or finding any violation of such laws.
Item 3. Source and Amount of Funds or Other Consideration.
In connection with the purchase of the Companies' Paired
Shares, Apollo purchased an aggregate of 807,000 Paired Shares for a total
amount of $15,559,755 as of the date hereof. The purchases were financed
with cash on hand and borrowed funds pursuant to a margin loan made in the
ordinary course of business by a registered broker-dealer. Koll purchased
an aggregate of 1,000 Paired Shares for a total amount of $20,250 with cash
on hand.
Item 4. Purpose of the Transaction.
As described in the Companies' Form 8-K filed with the
Securities and Exchange Commission, on August 17, 1996, the Boards of
Directors of the Companies approved a transaction with Colony Investments
II ("Colony") to effect a transfer of control of the Companies to Colony.
Apollo reviewed the Colony transaction and believes that such transaction
is not in the best interests of the stockholders of the Companies because
(i) control of the Companies would be transferred yet no cash would be paid
to stockholders, (ii) control of the Companies would be transferred at a
price of $12.98 per Paired Share, a price significantly below the Paired
Shares' market value, (iii) Board approval was granted absent consideration
of any alternative proposals, and (iv) further dilution of current
stockholders' value would occur as a result of a long-term, fixed, below-
market option granted to Colony to acquire 45% of the Companies. In
response to the Boards' approval of the Colony transaction, on October 8,
1996, KAI contacted the Companies to propose an alternative
recapitalization plan involving KAI (the "Recapitalization"). On or about
October 21, 1996, Koll requested stockholder lists from the Companies in
order to communicate with stockholders of the Companies with respect to the
Recapitalization. The purposes of the purchases disclosed in Item 5 are to
acquire an equity interest in the Companies and to further the
Recapitalization.
Under the Recapitalization, each current stockholder would
receive consideration per Paired Share of at least $17.00, constituted of
$14.00 per Paired Share in cash to be paid to current stockholders as a
special dividend (the "Dividend") and at least $3.00 in Paired Shares which
would continue to be held by the stockholder after the Recapitalization. In
connection with the Recapitalization, KAI would make an initial cash
investment in the Companies of at least $50 million. KAI would further
ensure that its initial investment, together with the proceeds of an
anticipated financing, will be sufficient to pay the Dividend. The Dividend
would be paid to all stockholders other than KAI.
In exchange for its investment, KAI would receive (i) newly
issued Paired Shares representing ownership in Realty and Operating of
approximately 9.8% and (ii) interests in two newly formed limited liability
entities equal in value to the balance of KAI's investment. Such entities
will be formed as soon as practicable after consummation of KAI's initial
investment by causing Realty to contribute substantially all of its
properties and assets, subject to substantially all of its liabilities (the
"Realty OP") and Operating and its subsidiaries to contribute substantially
all of their properties and operating assets, subject to substantially all
of their liabilities ("the "Operating OP" and together with Realty OP, the
"OPs"). Units of the OPs to be issued to KAI will be exchangeable, together
but not separately, for shares of the Paired Shares of Realty and Operating
equal to percentage ownership of the OPs represented by the units tendered.
Any exchange of units will be subject to the prohibition against any
issuance of shares that would cause Realty to fail to satisfy the REIT
tests. It is contemplated that KAI will acquire an aggregate of 16,667,000
newly issued paired shares and newly created interests in the limited
liability entities.
In order to allow all stockholders to participate in
attractive investment opportunities without dilution, subject to applicable
securities laws, KAI will cause the Companies to issue rights (the
"Rights") within six months of the closing of the Recapitalization to
purchase an aggregate of $50 million of equity in the Companies to all
stockholders. The Rights will entitle all stockholders to purchase one
new Paired Share of the Companies at a price of $2.00 for each Paired Share
they own at the time of the Rights issuance at any time through 1998. KAI
believes that the value of each Right will be at least $2.00 per existing
Paired Share and is prepared to serve as a standby purchaser for such
Rights offerings. Following completion of the Rights offering, KAI will
invest up to an additional $100 million in the Companies if sufficient
capital is not otherwise available to enable the Companies to take
advantage of attractive investment opportunities.
After the completion of the Recapitalization, the Boards of
Directors of the Companies would include a majority of KAI nominees. KAI
will support the election of up to three existing directors to serve as
independent directors to ensure continuity in representation of public
stockholders. KAI, or an affiliate, would serve as the managing general
partner of each of the OPs. KAI is committed to pursuing programs which
focus on maximizing stockholder realization on existing core assets,
including the enhancement of parimutuel operations and the development of
excess acreage at Santa Anita. KAI has been in contact with recognized
industry experts and intends to continue to seek the assistance of major
constituents in finalizing an optimal approach to enhancing the value of
Santa Anita's racing product. Furthermore, KAI intends to maximize the
value of the Paired Share format by pursuing acquisitions, mergers, joint
ventures and other business arrangements with real estate intensive
operating businesses.
The Reporting Persons will on an ongoing basis continue to
evaluate their investment in the Paired Shares. Each of the Reporting
Persons retains the right to change its intent with respect to the
Companies, to acquire additional Paired Shares or to sell or otherwise
dispose of all or a part of the Paired Shares beneficially owned by such
Reporting Persons in any manner permitted by law.
Item 5. Interest in Securities of the Issuer.
(a) As of the date hereof, AREIF II, AREA II and KAI
beneficially own an aggregate of 807,000 Paired Shares which represents
approximately 7.09% of the outstanding shares of Realty and 7.16% of the
outstanding shares of Operating.
As of the date hereof, Koll beneficially owns an aggregate
of 808,000 Paired Shares which represents 7.10% of the outstanding shares
of Realty and 7.17% of the outstanding shares of Operating. AREIF II, AREA
II and KAI disclaim beneficial ownership of 1,000 Paired Shares owned
solely by Koll. No other person named in Item 2 beneficially owns any
Paired Shares.
(b) The Reporting Persons share the voting and dispositive
power with respect to the 807,000 Paired Shares which they beneficially
own. Koll has sole power to vote and dispose the remaining 1,000 shares
which it beneficially owns.
To the best of the Reporting Persons' knowledge, none of the
individuals listed on Schedule I owns any Paired Shares or can vote or
direct the vote of any Paired Shares, nor can any such individual dispose
or direct the disposition of any Paired Shares.
(c) Except as set forth on Schedule II and the 1,000 shares
purchased by Koll on October 14, 1996 at $20.25 per Paired Share in an open
market transaction, no person named in response to paragraph (a) of this
Item has effected any transaction in the Paired Shares during the past
sixty days.
(d) Other than as set forth in Item 6, no other person is
known to have the right to receive or the power to direct the receipt of
dividends from, or the proceeds from the sale of, the Paired Shares.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or
Relationships With Respect to Securities of the Issuer.
AA and Koll expect to enter into a definitive agreement with
respect to their investment in the Companies and the operation and
management of KAI. Apollo and Koll have agreed that Koll will receive from
Apollo certain percentages of all fees, reimbursements and profits on
shares of Paired Shares owned by Apollo and its affiliates less certain
expenses incurred by Apollo in connection with Apollo's investment in the
Companies and agreed returns on such investment.
Item 7. Material to be Filed as Exhibits.
Not applicable.
SCHEDULE I
The following sets forth information with respect to the
executive officers and directors of Capital Advisors II, which is the sole
general partner of AREA II, and the members of Koll Arcadia LLC.
Messrs. Leon D. Black, John J. Hannan and William L. Mack
are executive officers and directors of Capital Advisors II. The principal
occupation of each of Messrs. Black and Hannan is to act as an executive
officer and director of Apollo Capital Management, Inc., a Delaware
corporation ("Apollo Capital"), and of Lion Capital Management, Inc., a
Delaware corporation ("Lion Management"). Messrs. Black and Hannan are
founding principals of Apollo Advisors, L.P. ("Apollo Advisors"), Lion
Advisors, L.P. ("Lion Advisors"), and together with Mr. Mack of Apollo Real
Estate Advisors II, L.P. The principal occupation of Mr. Mack is to act as
a consultant to Apollo Advisors and as a principal to Apollo Real Estate
Advisors, L.P. and to act as President and Managing Partner of the Mack
Organization, an owner and developer of and investor in office and
industrial buildings and other commercial properties. The principal
business of Apollo Advisors and of Lion Advisors is to provide advice
regarding investments in securities and the principal business of Apollo
Real Estate Advisors, L.P. is to provide advice regarding investments in
real estate and real estate-related investments. The business address of
each of Messrs. Black, Hannan and Mack is c/o Apollo Real Estate Management
II, L.P., 1301 Avenue of the Americas, New York, New York 10019.
Messrs. Donald M. Koll and James C. Watson are the operating
members of Koll Arcadia LLC. Mr. Koll's principal business is business
investor and real estate developer throughout the United States, Asia and
Mexico. The principal business of Mr. Watson is the development of real
estate investments. The business address of Messrs. Koll and Watson is
4343 Von Karman Avenue, Newport Beach, California 92660.
SCHEDULE II
TRANSACTIONS IN THE SECURITIES
Set forth below are the transactions in the Paired Shares
that were effected during the past sixty days by AREIF II through its
registered broker-dealer in New York.
Date Number of Paired Shares Price per Share
9/4/96 3,300 $17.0000
9/6/96 6,800 16.8750
9/12/96 21,000 17.5540
9/13/96 22,900 17.4840
9/16/96 5,000 17.2500
9/17/96 51,000 17.5490
9/18/96 49,500 17.5152
9/19/96 29,500 17.9960
9/20/96 18,100 17.9137
9/24/96 15,000 18.2330
9/25/96 20,000 18.1412
9/27/96 11,000 18.2386
9/30/96 20,000 18.4968
10/2/96 15,000 18.48330
10/3/96 2,000 18.50000
10/9/96 189,400 20.09400
10/10/96 49,000 20.18800
10/11/96 25,000 20.25000
10/14/96 41,600 20.24900
10/15/96 21,100 20.25000
10/16/96 50,000 20.14500
10/17/96 1,000 20.00000
10/18/96 78,500 20.00000
10/21/96 38,700 20.03200
10/22/96 22,600 20.00000
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.
Dated: October 24, 1996
APOLLO REAL ESTATE INVESTMENT FUND II, L.P.
By: Apollo Real Estate Advisors II, L.P.
Managing Member
By: Apollo Real Estate Capital Advisors II, Inc.
General Partner
By: /s/ Michael D. Weiner
Name: Michael D. Weiner
Title: Vice President,
Apollo Real Estate Capital
Advisors II, Inc.
APOLLO REAL ESTATE ADVISORS II, L.P.
By: Apollo Real Estate Capital Advisors II, Inc.
General Partner
By: /s/ Michael D. Weiner
Name: Michael D. Weiner
Title: Vice President,
Apollo Real Estate Capital
Advisors II, Inc.
KOLL ARCADIA INVESTORS, LLC
By: Apollo Arcadia LLC
Member
By: /s/ Michael D. Weiner
Name: Michael D. Weiner
KOLL ARCADIA LLC
By:/s/ James C. Watson
Name: James C. Watson
