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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO.2 TO
SCHEDULE 14D-9
Solicitation/Recommendation Statement Pursuant to
Section 14(d) of the Securities Exchange Act of 1934
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FORUM RETIREMENT PARTNERS, L.P.
(Name of Subject Company)
FORUM RETIREMENT, INC.
FORUM RETIREMENT PARTNERS, L.P.
(Name of Persons Filing Statement)
PREFERRED DEPOSITARY UNITS REPRESENTING
PREFERRED LIMITED PARTNERS' INTERESTS
(Title of Class of Securities)
349 851 105
(CUSIP Number of Class of Securities)
RICHARD A. HUBER
SECRETARY
FORUM RETIREMENT, INC.
11320 RANDOM HILLS ROAD
SUITE 400
FAIRFAX, VIRGINIA 22030
(703) 277-7000
(Name, address and telephone number of person authorized to receive notice
and communications on behalf of person filing statement)
With a copy to:
Jeffery B. Floyd, Esq.
Vinson & Elkins L.L.P.
1001 Fannin, Suite 2300
Houston, Texas 77002
(713) 758-2222
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AMENDMENT NO. 2 TO SOLICITATION/RECOMMENDATION STATEMENT ON SCHEDULE 14D-9
This Amendment No. 2 to Solicitation/Recommendation Statement on
Schedule 14D-9 (this "Amendment") is an amendment of the
Solicitation/Recommendation Statement on Schedule 14D-9 filed October 16, 1995,
as previously amended by Amendment No.1 filed October 17, 1995 (as amended by
Amendment No.1, the "Schedule 14D-9"), by Forum Retirement Partners, L.P., a
Delaware limited partnership (the "Partnership"), and Forum Retirement, Inc.,
the sole general partner of the Partnership and a Delaware corporation (the
"General Partner"), relating to the tender offer made by Forum Group, Inc.,
an Indiana corporation ("Forum Group"), to purchase any and all of the issued
and outstanding Units not beneficially owned by it. All capitalized terms used
in this Amendment and not defined herein have the meanings set forth in the
Schedule 14D-9.
ITEM 4. THE SOLICITATION OR RECOMMENDATION
Item 4(b) of the Schedule 14D-9 is hereby amended and supplemented by
adding the following information with respect to the reasons for the
recommendation:
In addition to the other matters described in the Schedule 14D-9, in
evaluating the Offer, the Special Committee considered the fact that the Offer
of $2.83 exceeds the net book value per Unit of the Partnership of
approximately $2.54 as of June 30, 1995. The Special Committee also
considered the fact that the Offer was not conditioned on acceptance of the
Offer by a majority of the Unitholders to whom it was directed and determined
that the lack of such condition permitted each Unitholder to make its own
decision regarding whether to tender Units pursuant to the Offer. The Special
Committee did not consider liquidation value to be material to its
determination because, among other factors, the prior decision by the General
Partner's Board to expand certain of the Partnership's Properties and to apply
the Partnership's available cash flow to such expansion, Forum Group's stated
intention to make capital available to the Partnership to accelerate the
expansion program if it significantly increases its equity ownership in the
Partnership through the Offer, Forum Group's contractual right of first refusal
on the Partnership's Properties, the fact that in a liquidation the deferred
management fees of $15,780,000 would become due and payable, and the fact that
the Partnership could not be liquidated without the approval of Forum Group
pursuant to the terms of the Partnership Agreement.
The Special Committee approved the conclusion and analyses of RAI&Co.;
however, the Special Committee did not adopt the opinion of RAI&Co as the
exclusive basis for its determination as to the fairness of the Offer. Rather,
the Special Committee included RAI&Co's opinion in the total mix of information
regarding the Offer that was available to, and evaluated by, it. The Special
Committee believes that RAI&Co's analyses support the Special Committee's
determination that the Offer is fair to the Unitholders (other than Forum Group
and its affiliates), because, among other things, the $2.83 per Unit cash price
is in the upper half of the range of the various per Unit ranges resulting from
the analyses by RAI&Co. See "Item 4. The Solicitation or Recommendation --
Opinion of Financial Advisor" in the Schedule 14D-9.
A decision as to the fairness of a transaction takes into account
numerous factors, including quantifiable per Unit values resulting from various
financial analyses. The various financial analyses performed by RAI&Co in
connection with its presentation and the rendering of its fairness opinion to
the Special Committee resulted in a range of possible per Unit valuations. As
set forth under the caption "Item 4. The Solicitation or Recommendation --
Reasons for the Recommendation" in the Schedule 14D-9, the Special Committee
considered, among other things, such valuation ranges before determining to
recommend the Offer at $2.83 per Unit. Such price per Unit valuation is above
the mid-point of each of such ranges. The Special Committee believes that the
Offer is fair, notwithstanding the fact that the highest end of the various
valuation ranges considered by it exceeds the $2.83 per Unit price in the
Offer.
In making its determination and recommendation regarding the fairness
of the Offer, the members of the Special Committee considered various factors,
including their knowledge of the business, results of operations, properties,
financial condition and prospects of the Partnership, including, without
limitation, the economic limitations likely to be imposed on the Partnership as
a result of a possible change in tax status beginning in 1998. The Special
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Committee member's knowledge of the business, results of operations, properties
and financial condition included that gained from the meeting of the Special
Committee with the representatives of the management of Forum Group on October
5, 1995, and their own experience from serving on the Board of Directors of the
General Partner during the preceding two years and in that role overseeing the
management of the affairs of the Partnership. With regard to the prospects of
the Partnership, the members of the Special Committee reviewed and evaluated
the ten year financial projections summarized under the caption "Item 8.
Additional Information -- Certain Financial Projections" in the Schedule
14D-9. The Special Committee also took their knowledge into account in
considering and analyzing the other factors set forth under the caption "Item
4. The Solicitation or Recommendation -- Reasons for the Recommendation" in the
Schedule 14D-9.
RAI&Co has reissued its opinion dated October 13, 1995, to replace the
paragraph of the opinion that stated, "This opinion is for the General
Partner's Special Committee and its Board of Directors and is not to be quoted
or referred to in whole or in part in any written document, nor shall this
letter be delivered to or relied upon by any other person or used for any other
purpose, except as provided and upon the terms and conditions agreed to in the
engagement agreement between the General Partner and ROBERT A. INNAMORATI &
CO., INC." with the following sentence:
"This opinion is being delivered pursuant to the terms and conditions
agreed to in the engagement agreement between the General Partner and
ROBERT A. INNAMORATI & CO., INC."
In reissuing its opinion, RAI&Co did not supplement or update its work or
analyses performed and summarized under "Item 4. The Solicitation or
Recommendation -- Opinion of Financial Advisor" in the Schedule 14D-9.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
1. - Offer to Purchase (incorporated by reference to Exhibit
(a)(1) to Forum Group's Schedule 14D-1 dated October 2,
1995).
2. - Supplement to Offer to Purchase dated October 16, 1995
(incorporated by reference to Exhibit (a)(9) to Forum
Group's Amendment No. 1 to Schedule 14D-1 dated October 16,
1995).
3. - Letter of Transmittal (incorporated by reference to Exhibit
(a)(2) to Forum Group's Schedule 14D-1 dated October 2,
1995).
4. - Letter to Unitholders dated October 16, 1995.
5. - Press release dated October 16, 1995 (incorporated by
reference to Exhibit (a)(10) to Forum Group's Amendment No.
1 to Schedule 14D-1 dated October 16, 1995).
6. - Fairness opinion of Robert A. Innamorati & Co. dated
October 13, 1995 (attached as Annex A hereto).
7. - Form of Indemnification Agreement between Forum Group and
the directors and officers of the General Partner.
8. - Form of Indemnification Agreement between Forum Retirement,
Inc .and its directors.
9. - Amended and Restated Agreement of Limited Partnership,
dated as of December 29, 1986, of the Partnership, as
amended (incorporated by reference to Exhibit 4(1) to the
Partnership's Registration Statement on Form S-2
(Registration No. 33-71498), dated November 10, 1993 (the
"Form S-2")).
10. - Depositary Agreement, dated as of December 29, 1986, by and
among the Partnership, Forum Retirement, Inc., the general
partner of the Partnership, as general partner and
attorney-in-fact of
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the limited partners, Manufacturers Hanover Trust Company
(which subsequently assigned its interests thereunder to
American Stock Transfer & Trust Company) and all holders
from time to time of depositary receipts (incorporated by
reference to Exhibit 10(6) to the Form S-2).
11. - Recapitalization Agreement, dated as of October 6, 1994, by
and between Forum Group and the Partnership (incorporated
by reference to Exhibit 10(1) to the Partnership's Current
Report on Form 8-K dated October 12, 1993).
12. - Letter Agreement, dated December 14, 1993, by and among
Forum Group, Forum A/H, Inc. and the Partnership
(incorporated by reference to Exhibit 2(3) of Amendment No.
1 to the Form S-2, dated December 21, 1993).
13. - Management Agreement, dated as of December 29, 1986 (the
"Management Agreement"), by and among the Partnership,
Forum Retirement Operations, L.P. ("Operations"), Forum
Health Partners 1-A, L.P., Foulk Manor Partners, L.P., and
Forum Group (incorporated by reference to Exhibit 10(1) to
the Form S-2).
14. - First Amendment to the Management Agreement, dated as of
September 20, 1986 (incorporated by reference to Exhibit
10(2) to the Form S-2).
15. - Second Amendment to the Management Agreement, dated as of
September 20, 1989 (incorporated by reference to Exhibit
10(3) to the Form S-2).
16. - Third Amendment to the Management Agreement, dated as of
May 27, 1992 (incorporated by reference to Exhibit 10(4) to
the Form S-2).
17. - Fourth Amendment to the Management Agreement, dated as of
November 9, 1993 (incorporated by reference to Exhibit
10(5) to the Form S-2).
18. - Option Agreement, dated as of December 29, 1986, by and
among Forum Group, Inc., the Partnership, and Operations
(incorporated by reference to Exhibit 2(1) to the Form
S-2).
19. - Presentation to the Special Committee of the Board of
Directors of the General Partner of the Partnership
delivered by Robert A. Innamorati & Co. on October 13,
1995.
* 20. - Fairness opinion of Robert A. Innamorati & Co. dated
October 13, 1995, reissued.
21. - Supplement to Offer to Purchase dated November 1, 1995
(incorporated by reference to Exhibit (d)(12) to Forum
Group's Amendment NO. 2 to Schedule 14D-9 dated November 1,
1995).
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* Filed herewith
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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: November 1, 1995
FORUM RETIREMENT PARTNERS, L.P.
By: Forum Retirement, Inc.
its General Partner
By: /S/ RICHARD A. HUBER
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Richard A. Huber
Secretary
FORUM RETIREMENT, INC.
By: /S/ RICHARD A. HUBER
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Richard A. Huber
Secretary
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EXHIBIT INDEX
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1. - Offer to Purchase (incorporated by reference to Exhibit (a)(1) to Forum Group's
Schedule 14D-1 dated October 2, 1995).
2.- Supplement to Offer to Purchase dated October 16, 1995 (incorporated by reference
to Exhibit (a)(9) to Forum Group's Amendment No. 1 to Schedule 14D-1 dated
October 16, 1995).
3.- Letter of Transmittal (incorporated by reference to Exhibit (a)(2) to Forum Group's
Schedule 14D-1 dated October 2, 1995).
4.- Letter to Unitholders dated October 16, 1995.
5.- Press release dated October 16, 1995 (incorporated by reference to Exhibit (a)(10)
to Forum Group's Amendment No. 1 to Schedule 14D-1 dated October 16, 1995).
6.- Fairness opinion of Robert A. Innamorati & Co. dated October 13, 1995 (attached
as Annex A hereto).
7.- Form of Indemnification Agreement between Forum Group and the directors and
officers of the General Partner.
8.- Form of Indemnification Agreement between Forum Retirement, Inc .and its directors.
9.- Amended and Restated Agreement of Limited Partnership, dated as of December 29, 1986,
of the Partnership, as amended (incorporated by reference to Exhibit 4(1) to the
Partnership's Registration Statement on Form S-2 (Registration No. 33-71498), dated
November 10, 1993 (the "Form S-2")).
10.- Depositary Agreement, dated as of December 29, 1986, by and among the Partnership, Forum
Retirement, Inc., the general partner of the Partnership, as general partner and attorney-in-fact
of the limited partners, Manufacturers Hanover Trust Company (which subsequently assigned
its interests thereunder to American Stock Transfer & Trust Company) and all holders from
time to time of depositary receipts (incorporated by reference to Exhibit 10(6) to the Form S-2).
11.- Recapitalization Agreement, dated as of October 6, 1994, by and between Forum Group
and the Partnership (incorporated by reference to Exhibit 10(1) to the Partnership's
Current Report on Form 8-K dated October 12, 1993).
12.- Letter Agreement, dated December 14, 1993, by and among Forum Group, Forum A/H, Inc.
and the Partnership (incorporated by reference to Exhibit 2(3) of Amendment No. 1 to the
Form S-2, dated December 21, 1993).
13.- Management Agreement, dated as of December 29, 1986 (the "Management Agreement"), by
and among the Partnership, Forum Retirement Operations, L.P. ("Operations"), Forum Health
Partners 1-A, L.P., Foulk Manor Partners, L.P., and Forum Group (incorporated by reference to
Exhibit 10(1) to the Form S-2).
14.- First Amendment to the Management Agreement, dated as of September 20, 1986 (incorporated by
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reference to Exhibit 10(2) to the Form S-2).
15.- Second Amendment to the Management Agreement, dated as of September 20, 1989
(incorporated by reference to Exhibit 10(3) to the Form S-2).
16.- Third Amendment to the Management Agreement, dated as of May 27, 1992
(incorporated by reference to Exhibit 10(4) to the Form S-2).
17.- Fourth Amendment to the Management Agreement, dated as of November 9, 1993
(incorporated by reference to Exhibit 10(5) to the Form S-2).
18.- Option Agreement, dated as of December 29, 1986, by and among Forum Group, Inc.,
the Partnership, and Operations (incorporated by reference to Exhibit 2(1) to the Form S-2).
19.- Presentation to the Special Committee of the Board of Directors of the General Partner of
the Partnership delivered by Robert A. Innamorati & Co. on October 13, 1995.
*20.- Fairness opinion of Robert A. Innamorati & Co. dated October 13, 1995, reissued.
21.- Supplement to Offer to Purchase dated November 1, 1995 (incorporated by reference
to Exhibit (d)(12) to Forum Group's Amendment NO. 2 to Schedule 14D-9
dated November 1, 1995).
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* Filed herewith
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EXHIBIT 20
October 13, 1995
Special Committee of the Board of Directors
Forum Retirement, Inc.
8900 Keystone Crossing
Suite 200
P.O. Box 40498
Indianapolis, IN 46240
Attn : Mr. John Sexton
Mr. James Leslie
Gentlemen:
Forum Group, Inc. (the "Purchaser") has offered to purchase any and all of the
outstanding preferred depositary units (the "Units") representing preferred
limited partners' interests in Forum Retirement Partners, L.P. (the
"Partnership"), at a price of $2.83 per Unit net to the seller in cash (the
"Offer"). The Offer commenced on October 2, 1995 and is expected to be amended
no later than October 16, 1995 to reflect the foregoing price per Unit.
You have asked us whether, in our opinion, the proposed cash consideration to
be received by the holders of Units, other than the Purchaser and its
affiliates, (the "Unaffiliated Limited Partners") is fair to such
Unaffiliated Limited Partners, from a financial point of view.
In arriving at our opinion, we have reviewed the Offer to Purchase and
financial and other information that was publicly available or furnished to us
by Forum Retirement, Inc. (the "General Partner"), or its affiliates and
representatives, including certain financial projections for the Partnership
and information provided by the General Partner or its affiliates in
discussions therewith concerning the Partnership's business, operations and
future prospects. In addition, we have compared certain financial and
securities data of the Partnership with various other entities in similar
businesses whose securities are traded in public markets, reviewed other cash
tender offer transactions and conducted such other financial studies, analyses
and investigations as we deemed appropriate for purposes of this opinion.
In rendering the opinion set forth below, we have assumed and relied upon,
without independent verification: the accuracy and completeness of the
financial and other information obtained by us from public sources and that was
provided to us by the General Partner or its affiliates and representatives.
With respect to the financial projections supplied to us, we have assumed they
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Forum Retirement, Inc.
October 13, 1995
Page 2
have been reasonably prepared on the basis of the best currently available
estimates and judgments of the General Partner or its affiliates, and with
reasonable assumptions as to the future operating and financial performance of
the Partnership. We have neither made nor obtained any independent appraisal
of the assets or liabilities of the Partnership nor have we conducted any
physical inspection of the properties and facilities of the Partnership.
Our opinion is necessarily based on the status and condition of the Partnership
and economic, market, financial and other conditions as they exist on, and on
the information made available to us as of, the date of this letter. It should
be understood that, although subsequent developments may affect this opinion,
we do not have any obligation to update or revise this opinion. This opinion
is being delivered pursuant to the terms and conditions agreed to in the
engagement agreement between the General Partner and ROBERT A. INNAMORATI &
CO., INC.
Based on the foregoing and such other factors as we deem relevant, we are of
the opinion that the proposed cash consideration to be received by the
Unaffiliated Limited Partners pursuant to the Offer is fair to such
Unaffiliated Limited Partners, from a financial point of view.
Very truly yours,
ROBERT A. INNAMORATI & CO., INC.
By: /s/ Robert A. Innamorati
____________________________________
Robert A. Innamorati
President
