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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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SCHEDULE 14D-1/A
Tender Offer Statement Pursuant To Section 14(d)(1) of
the Securities Exchange Act of 1934
(Amendment No. 1)
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BALCOR/COLONIAL STORAGE INCOME FUND - 85,
AN ILLINOIS LIMITED PARTNERSHIP
(Name of Subject Company)
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PUBLIC STORAGE, INC.
(Bidder)
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Interests in Limited Partnership
(Title of Class of Securities)
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NONE
(CUSIP Number of Class of Securities)
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DAVID B.H. MARTIN, JR.
Hogan & Hartson L.L.P.
555 Thirteenth Street, NW
Washington, DC 20004-1109
(202) 637-5600
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications on Behalf of Bidder)
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CALCULATION OF REGISTRATION FEE
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Transaction Valuation * Amount of Filing Fee
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$14,538,300 $2,908
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* This Tender Offer Statement on Schedule 14D-1 is being filed in connection
with an Offer made by Public Storage, Inc. to acquire up to 69,230 of the
outstanding Limited Partnership interests in Balcor/Colonial Storage Income Fund
- - 85, an Illinois Limited Partnership. The total value of the transaction was
estimated solely for purposes of calculating the filing fee.
[ ] Check box if any part of the fee is offset as provided by Rule 0-
11(a)(2) and identify the filing with which the offsetting fee was
previously paid. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
Amount Previously Paid: Not Applicable
Form or Registration No.:
Filing Party:
Date Filed:
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1) Name of Reporting Person: Public Storage, Inc.
S.S. or I.R.S. Identification No. of Above Person: 95-355121
2) Check the Appropriate Box if a Member of a Group (See Instructions)
[ ] (a)
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[ ] (b)
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3) SEC Use Only
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4) Sources of Funds (See Instructions): WC
5) [ ] Check Box if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(e) or 2(f).
6) Citizenship or Place of Organization: California
7) Aggregate Amount Beneficially Owned by Each Reporting Person:
25,838.779 Limited Partnership interests.
8) [ ] Check if the Aggregate Amount in Row 7 Excludes Certain Shares
(See Instructions).
9) Percent of Class Represented by Amount in Row 7: 9.3%
10) Type of Reporting Person (See Instructions): CO
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INTRODUCTION
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This filing is composed of a supplement to the Offer to Purchase dated
August 29, 1996 which was filed as Exhibit (a)(1) to the Schedule 14D-1 filed on
August 29, 1996.
Item 11. Material to be filed as Exhibits.
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Exhibit (a)(3) Supplement to Offer to Purchase dated August 29, 1996.
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SIGNATURE
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After reasonable inquiry and to the best of its knowledge and belief,
the undersigned certifies that the information set forth in this statement is
true, correct and complete.
Dated: September 27, 1996 PUBLIC STORAGE, INC.
By: /s/ Harvey Lenkin
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Harvey Lenkin
President
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SUPPLEMENT DATED SEPTEMBER 27, 1996 TO OFFER TO PURCHASE
DATED AUGUST 29, 1996 BY PUBLIC STORAGE, INC.
The Offer to Purchase Partnership Interests in Balcor/Colonial Storage
Income Fund - 85 made by Public Storage, Inc. dated August 29, 1996 (the "Offer
to Purchase") is supplemented as follows. Capitalized terms not otherwise
defined herein shall have the same meanings as set forth in the Offer to
Purchase.
1. Paragraph three on page (ii) of the Offer to Purchase is hereby revised to
read in its entirety as follows:
. Less Than Secondary Market Prices. The Offer Price ($210) is
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below certain secondary market prices for Interests ($211 to $240
for transactions during the first quarter of 1996). During 1995,
the Company purchased 515 Interests in the secondary market at
prices from $224 to $230. See "Market Prices of Interests" and
"Background and Purpose of the Offer -- Background of the Offer."
The Offer Price also is less than the Company's revised estimate
of the possible amount to be received per Interest based upon
the Company's liquidation methodology ($231 based upon
information contained in a Schedule 14D-9 filed by the General
Partners on September 9, 1996).
2. A new paragraph five is hereby added on page (ii) of the Offer to Purchase
as follows:
. Voting Power. The Company currently owns 9.3% of the outstanding
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Interests and could, after the Offer, own as much as 34.3% of the
outstanding Interests. The Company could then be in a position
to influence decisions on which Limited Partners are entitled to
vote, such as (i) sales of all or substantially all of the
Partnership's real estate assets, (ii) removal of the General
Partners, (iii) dissolution of the Partnership, and (iv)
amendments of the Partnership Agreement. If the Company were
substituted as general partner of the Partnership in lieu of the
General Partners, the Company could appoint itself as manager of
the Partnership's properties.
3. The first full paragraph on page 4 of the Offer to Purchase under the
caption "Voting Power" is hereby revised to read in its entirety as follows:
Voting Power. Limited Partners cannot participate in the
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management or control of the Partnership's business, except insofar as
the Limited Partners are entitled to vote as permitted by the
Partnership Agreement. Pursuant to the Partnership Agreement, the
written consent of Balcor Storage Partners - 85, an Illinois
partnership and a General Partner of the Partnership ("Balcor Storage
Partners") would be required for the Company to become a substituted
Limited Partner. Although the Offer is not contingent upon the
Company being made a substituted Limited Partner, effective upon the
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Company's acceptance for payment of the tendered Interests, the
Interest Holder will grant to the Company an irrevocable proxy to vote
such Interests in such manner as the Company shall deem proper. If
the maximum number of Interests sought are tendered and accepted for
payment pursuant to the Offer, the Company will own and be able to
vote approximately 34.3% of the outstanding Interests. The Company
could then be in a position to influence decisions of the Partnership
on which Limited Partners are entitled to vote. Under the Partnership
Agreement, Limited Partners are entitled to vote, subject to certain
provisions of the Partnership Agreement, to: (i) approve any proposed
sale of all or substantially all of the real property assets of the
Partnership; (ii) remove either or both of the General Partners and
elect or approve a successor to any removed or withdrawn General
Partner; (iii) dissolve the Partnership; and (iv) approve any
amendment of the Partnership Agreement. Although the Company has not
finalized its plans with respect to the Partnership, the Company may
take action with regard to one or more of these matters. The Company
will vote the Interests acquired pursuant to the Offer in its
interest, which may, or may not, be in the best interests of non-
tendering Interest Holders. If the Company were substituted as
general partner of the Partnership in lieu of the General Partners,
the Company could appoint itself as manager of the Partnership's
properties. See "Background and Purpose of the Offer -- Purpose of
the Offer."
4. The last paragraph beginning on page 8 of the Offer to Purchase
under the caption "Purpose of the Offer" and continuing onto page 9 is hereby
revised to read in its entirety as follows:
The Company believes that the acquisition of Interests through
the Offer represents a good investment for the Company and its
shareholders. Although the Company has not finalized its plans with
respect to the Partnership, the Company may take one or more of the
following actions: (1) retain the Interests for investment purposes
only, (2) seek to acquire additional Interests following the
expiration of the Offer, possibly including additional tender offers,
(3) seek to acquire the Partnership's properties, possibly including
participating in any bid process initiated by the Partnership or (4)
seek to change management of the Partnership and/or its properties.
The Company's actions will depend on Interest Holders' response to the
Offer (i.e., the number of Interests tendered), the outcome of any
future discussions with representatives of the Partnership and
actions taken by the General Partners such as presenting a
liquidation proposal to the Limited Partners.
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5. A new first full paragraph is hereby added on page 9 of the Offer to
Purchase as follows:
Following completion of the Offer, the Company may
participate in the bid process for the Partnership's properties. The
General Partners have announced that the bid process will be completed
on September 30, 1996, the date the Offer is currently scheduled to
expire. Accordingly, the Company does not know whether the General
Partners would accept the Company's bid since any such bid would be
submitted after the scheduled expiration of the bid process.
6. A new second full paragraph is hereby added on page 9 of the Offer
to Purchase as follows:
If a bid submitted by the Company is not accepted, the Company
will consider the alternatives listed above. As of the date of this
Supplement, however, the Company has not determined what action, if
any, it will take, nor has the Company prepared or formulated any
specific plan for any such action other than to seek to participate in
the bid process. The Company has not determined upon what terms any
such bid would be submitted. Any such action, will depend to a large
extent upon what actions the General Partners take with respect to the
Partnership. The Company's ability to influence decisions of the
Partnership, including transactions between the Partnership and the
Company, such as a sale of the properties to the Company or the
engagement of the Company as property manager, would be significantly
facilitated if the Company acquired a significant number of Interests
in the Partnership through the Offer or otherwise.
7. A new third full paragraph and a new fourth full paragraph are hereby
added to page 9 of the Offer to Purchase under the caption "Determination of
Offer Price" as follows:
The Company selected the capitalization rate of 10.0% based on
its experience in purchasing mini-warehouses, the relatively small
size of many of the Partnership's properties and the fact that many of
the Partnership's properties are not located in major metropolitan
areas.
The General Partners have indicated in a Schedule 14D-9 filed on
September 9, 1996 that it is not appropriate for the Company to assume
the estimated liquidation amount to be reduced by deferred amounts
payable to the General Partners and property manager. Without such a
deduction, the Company's estimate, using a liquidation methodology,
would have been $231 per Interest.
8. The first full paragraph on page 18 of the Offer to Purchase under the
caption "Signigicant Equity Interest" is hereby revised to read in
its entirety as follows:
After the Offer, the Company could own up to approximately 34.3%
of the Interests. Pursuant to the Partnership Agreement, the written
consent of Balcor Storage Partners would be required for the Company
to become a substituted Limited Partner. Although the Offer is not
contingent upon the Company being made a substituted Limited Partner,
effective upon the Company's acceptance for payment of the tendered
Interests, the Interest Holder will grant to the
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Company an irrevocable proxy to vote such Interests in such manner as
the Company shall deem proper. The Company could then be in a position
to influence decisions of the Partnership on which Limited Partners
are entitled to vote. Limited Partners cannot participate in the
management or control of the Partnership's business, except insofar as
the Limited Partners are entitled to vote as permitted by the
Partnership Agreement. Under the Partnership Agreement, Limited
Partners may vote, subject to certain provisions of the Partnership
Agreement, to: (i) approve any proposed sale of all or substantially
all of the real property assets of the Partnership; (ii) remove either
or both of the General Partners and elect or approve a successor to
any removed or withdrawn General Partner; (iii) dissolve the
Partnership; and (iv) approve any amendment of the Partnership
Agreement. The Company will vote the Interests acquired pursuant to
this Offer according to its interest, which may or may not be in the
best interests of non-tendering Interest Holders. If the Company were
substituted as general partner of the Partnership in lieu of the
General Partners, the Company could appoint itself as manager of the
Partnership's properties.
