SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 2)
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 LLP
919 Third Avenue
New York, NY 10022
Telephone: (212) 735-2274
January 28, 1997
-----------------------------------------------------
(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: [ ]
SCHEDULE 13D
CUSIP NO._________
- --------------------------------------------------------------------------
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
- --------------------------------------------------------------------------
7 SOLE VOTING POWER
0
NUMBER OF -----------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY 989,900
OWNED BY -----------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 0
PERSON -----------------------------------------------------
WITH 10 SHARED DISPOSITIVE POWER
989,900
- --------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
989,900
- --------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES |_|
- --------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
8.6% of Realty; 8.7% of Operating
- --------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
PN
- --------------------------------------------------------------------------
SCHEDULE 13D
CUSIP NO. _________
- --------------------------------------------------------------------------
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
- --------------------------------------------------------------------------
7 SOLE VOTING POWER
0
NUMBER OF -----------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY 989,900
OWNED BY -----------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 0
PERSON -----------------------------------------------------
WITH 10 SHARED DISPOSITIVE POWER
989,900
- --------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
989,900
- --------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES |_|
- --------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
8.6% of Realty; 8.7% of Operating
- --------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
PN
- --------------------------------------------------------------------------
SCHEDULE 13D
CUSIP NO. __________
- --------------------------------------------------------------------------
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
- --------------------------------------------------------------------------
7 SOLE VOTING POWER
0
NUMBER OF -----------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY 989,900
OWNED BY -----------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 0
PERSON -----------------------------------------------------
WITH 10 SHARED DISPOSITIVE POWER
989,900
- --------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
989,900
- --------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES |_|
- --------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
8.6% of Realty; 8.7% of Operating
- --------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
OO
- --------------------------------------------------------------------------
SCHEDULE 13D
CUSIP NO. _______
- --------------------------------------------------------------------------
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
- --------------------------------------------------------------------------
7 SOLE VOTING POWER
0
NUMBER OF -----------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY 989,900
OWNED BY -----------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 0
PERSON -----------------------------------------------------
WITH 10 SHARED DISPOSITIVE POWER
989,900
- --------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
989,900
- --------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES |_|
- --------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
8.6% of Realty; 8.7% of Operating
- --------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
OO
- --------------------------------------------------------------------------
This Amendment No. 2 amends and supplements the following Items of
the Schedule 13D, as amended (the "Schedule 13D"), of Apollo Real Estate
Advisors II, L.P., Apollo Real Estate Investment Fund II, L.P., Koll
Arcadia Investors, LLC and Koll Arcadia LLC filed on October 24, 1996 with
the Securities and Exchange Commission with respect to the Paired Common
Stock of Santa Anita Realty Enterprises, Inc. and Santa Anita Operating
Company. Unless otherwise indicated, all capitalized terms used but not
defined herein have the meanings set forth in the Schedule 13D.
Item 3. Source and Amount of Funds or Other Consideration.
Item 3 is hereby restated in its entirety by the following:
In connection with the purchases of the Companies' Paired Shares,
Apollo purchased an aggregate of 988,900 Paired Shares for a total amount
of $19,912,529 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 Transaction.
Item 4 is hereby amended to include the following:
KAI PROPOSAL. On January 28, 1997, KAI made a $27 per Paired Share
cash proposal to the Special Committee of the Boards of the Companies (the
"Special Committee") to recapitalize the Companies (the
"Recapitalization"). In the Recapitalization, the Companies would (i) pay a
special cash dividend of $11 per Paired Share to all current shareholders
(the "$11 Special Dividend") and (ii) commence a self-tender offer to
purchase up to 5.6 million Paired Shares (the "Self Tender") in which
current stockholders of the Companies would have the option in addition to
payment of the $11 Special Dividend to (x) retain their existing Paired
Shares, (y) receive $16 in cash per Paired Share or (z) receive per Paired
Share an additional $11 in cash together with one warrant to purchase one
Paired Share at $16.25 per Paired Share for a five year period (the
"Warrant"). Neither KAI nor any of its affiliates intends to tender any
Paired Shares in the Self Tender. KAI estimates the value of the Warrants
at $5.00 per Warrant.
VALUE TO STOCKHOLDERS. Stockholders of the Companies would receive
for each Paired Share either (i) $27 in cash or (ii) $22 in cash
together with one Warrant valued at $5.00. In the Recapitalization,
KAI would cause the Companies to distribute up to an aggregate of $232
million to stockholders of the Companies and the Companies would retain
at least $20 million of net cash for use in their operations.
KAI believes that its transaction allows stockholders of the Compa-
nies to monetize their present gains in the Paired Shares without causing
significant market impact while enabling participation in the upside KAI
intends to create.
KAI EQUITY. To consummate the Recapitalization, subsequent to the
payment of the $11 Special Dividend, KAI would contribute an aggregate of
$61.5 million in exchange for approximately 5.6 million Paired Shares or
units of the OPs (as described below), exchangeable on a one-for-one basis
into Paired Shares, subject to REIT ownership limitations. KAI would also
acquire 2.3 million convertible preferred OP units or shares of convertible
preferred stock for an aggregate of $30 million at $13 per preferred unit.
Distributions on the preferred OP units would accrue at 12% per annum for
three years, then be payable on a current basis. The preferred OP units
would be convertible into Paired Shares at par value. KAI would therefore
have an overall investment of approximately $110 million in the restructured
Companies.
Under the Recapitalization, two newly formed limited liability
entities will be formed by causing Realty to contribute substantially all
of its properties and assets, subject to substantially all of its
liabilities, to a newly formed limited liability entity (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, to another limited liability entity (the "Operating OP" and
together with Realty OP, the "OPs").
DEBT FINANCING; WARRANTS. KAI would cause the OPs to borrow
approximately $95 million on a senior basis from an institutional lender.
Such institutional lender would also provide the OPs a two year bridge
facility for up to $40 million. Such loans would be secured by
substantially all the assets of the OPs. In addition, a third party
stand-by investor has committed to purchase one Warrant for each Paired
Share purchased by the Companies pursuant to the $16 all cash election
under the Self-Tender, up to 5.6 million Warrants, for $5 per Warrant, or
up to $28 million in the aggregate.
KAI OWNERSHIP. Following the $11 Special Dividend and assuming at
least 5.6 million Paired Shares are tendered and purchased in the Self
Tender, KAI would own approximately 58.5% of the outstanding Paired Shares
prior to exercise of any Warrants and approximately 40% of the outstanding
Paired Shares assuming exercise of all Warrants.
BOARD OF DIRECTORS. 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.
WARRANT LETTER AGREEMENT. On January 28, 1997, KAI entered into a
letter agreement (the "Letter Agreement") with Gotham Partners, L.P.
("Gotham") with respect to the Recapitalization pursuant to which Gotham
would, subject to the terms and conditions in such Letter Agreement,
purchase on a stand-by basis up to 5.6 million Warrants from the Companies
at $5.00 per Warrant, subject to certain adjustments as contained in the
Letter Agreement, or up to $28 million in the aggregate. Pursuant to the
terms of the Letter Agreement, Gotham would purchase from the Companies
one Warrant for each Paired Share purchased by the Companies pursuant to
the $16 all cash election under the Self-Tender. In consideration for
providing such stand-by commitment, the Letter Agreement provides that
Gotham would receive certain fees conditioned upon the number of Paired
Shares purchased in the Self Tender. In addition, under the terms of the
Letter Agreement, Gotham would have certain rights to acquire equity
interests in the Companies and the OPs in the event Gotham does not acquire
all of the Warrants issued.
Item 5. Interest in Securities of the Issuer.
Item 5 is hereby amended by restating the following sections in
their entirety:
(a) As of the date hereof, the Reporting Persons beneficially own an
aggregate of 989,900 Paired Shares which represents approximately 8.6% of
the outstanding shares of Realty and 8.7% of the outstanding shares of
Operating. 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 989,900 Paired Shares which they beneficially own.
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) No person named in response to paragraph (a) of this Item has
effected any transaction in the Paired Shares during the past sixty days.
Attached hereto as Annex I is a list of transactions in the Paired Shares
effected by the Reporting Persons since the filing of Amendment Number 1 to
the Schedule 13D.
Annex I.
Transaction in the Securities
The following are the transactions effected by the Reporting Persons
in the Paired Shares since the filing by the Reporting Persons of Amend-
ment Number 1 to the Schedule 13D.
Date Number of Paired Shares Price per Share
11/11/96 3,000 $25.3875
11/20/96 5,000 24.5000
11/21/96 10,500 24.9880
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: January 29, 1997
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
