SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14D-9
Solicitation/Recommendation Statement Pursuant to Section 14(d)(4) of the
Securities Exchange Act of 1934
(Amendment No. 2)
BALCOR PENSION INVESTORS-III
(Name of Subject Company)
BALCOR PENSION INVESTORS-III
(Name of Person(s) Filing Statement)
Limited Partnership Interests
(Title of Class of Securities)
N/A
(CUSIP Number of Class of Securities)
Thomas E. Meador
Chairman
The Balcor Company
Bannockburn Lake Office Plaza
2355 Waukegan Road, Suite A200
Bannockburn, Illinois 60015
(847) 267-1600
(Name, Address and Telephone Number of Persons Authorized to Receive Notice
and Communications on Behalf of the Person(s) Filing Statement)
Copy To:
Herbert S. Wander
Lawrence D. Levin
Katten Muchin & Zavis
Suite 1600
525 West Monroe Street
Chicago, Illinois 60661-3693
(312) 902-5200
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This Amendment No. 2 to Schedule 14D-9 amends the Schedule 14D-9 (the
"Schedule 14D-9") filed by Balcor Pension Investors-III, an Illinois limited
partnership (the "Partnership"), with the Securities and Exchange Commission on
May 29, 1996 and previously amended by Amendment No. 1 filed June 3, 1996. All
capitalized terms used herein but not otherwise defined shall have the meanings
ascribed to such terms in the Schedule 14D-9.
Item 7. Certain Negotiations and Transactions by the Subject Company
Item 7 hereby is amended by removing the information presently provided in
Item 7(a) and inserting the following as a new Item 7(a):
"On June 3, 1996, the Partnership received a non-binding proposal
from Heitman/JMB Advisory Corporation ("Heitman") to purchase all of the
Partnership's remaining real properties and mortgage loans. Inasmuch as
this proposal included certain terms and conditions which are not
acceptable to the Partnership, representatives of the General Partner
spoke with representatives of Heitman in an attempt to determine the
viability of the Heitman proposal and to request additional information on
certain matters, including Heitman's source of capital. On June 6, 1996,
the Partnership delivered a non-binding counterproposal to Heitman setting
forth the Partnership's asking price for the assets which would be
available for sale, and the basic terms and conditions upon which the
Partnership would be agreeable to pursuing negotiations. As of this time,
Heitman has not responded to this counterproposal and accordingly, the
General Partner does not know whether or not the terms and conditions
thereof are acceptable to Heitman.
Even if Heitman and the Partnership proceed with negotiations, the
Heitman Proposal is contingent on many factors including among others
Heitman's satisfactory due diligence review of the Partnership's
properties, the negotiation of a mutually acceptable purchase agreement
and Heitman's ability to obtain adequate capital to consummate the
transaction. Additionally, a sale of all or substantially all of the
Partnership's assets will require the approval of the holders of a
majority of the outstanding Units. If a contract for the sale of the
assets is executed with Heitman, the General Partner will attempt to
obtain the necessary Limited Partner approval through a proxy
solicitation.
As a result of the significant contingencies and conditions alluded
to above, there can be no assurance that a sale to Heitman will ultimately
be consummated, and in fact there is a very substantial risk that it will
not be. However, in the event that a sale of the assets is consummated at
the price contemplated in the Partnership's counterproposal, the net
proceeds from a sale to Heitman which would be available for distribution
to Limited Partners, when added to the available proceeds of the potential
sales described in the Letter to Investors filed as Exhibit 1 ("Letter")
and Partnership cash reserves, would be materially greater than the
amount of the Walton Street Offer. Even in the event that the sale to
Heitman and the other sales described in the Letter are consummated, there
can be no assurance what actual dollar amount of distributions to the
Limited Partners will be achieved.
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Except as set forth above, no negotiations are being undertaken or
are underway by the Partnership in response to the Offer which relate to
or would result in: (1) an extraordinary transaction such as a merger or
reorganization involving the Partnership or any affiliate controlled by
the Partnership; (2) a purchase, sale or transfer of a material amount of
assets by the Partnership or any affiliate controlled by the Partnership;
or (3) any material change in the present capitalization or distribution
policy of the Partnership."
Item 8. Additional Information to be Furnished.
Item 8(b)(i) hereby is amended to include the following additional
information:
"On June 5, in response to Motions to Dismiss filed by Walton Street
and Insignia, the Circuit Court of Cook County, Illinois, Chancery
Division, granted Walton Street's Motion to Dismiss and also granted
Insignia's Motion to Dismiss with leave to amend within 28 days. An
amended complaint asserting claims against Walton Street, Insignia and
Balcor was filed on June 11, 1996. Walton Street and Insignia have moved
to dismiss the amended complaint. Balcor's answer or other response to
the amended complaint is due on or before July 10, 1996."
Item 9. Material to be Filed as Exhibits
Item 9 hereby is amended to include the following exhibit:
"6. (c)(5) Letter to Investors, dated June 14, 1996"
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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: June 14, 1996 BALCOR PENSION INVESTORS - III
By: Balcor Mortgage Advisors-II,
its general partner
By: RGF-Balcor Associates-II,
a general partner
By: The Balcor Company,
a general partner
By: /s/Thomas E. Meador
---------------------------
Thomas E. Meador, Chairman
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BALCOR PENSION INVESTORS-III
P.O. BOX 7190
DEERFIELD, ILLINOIS 60015-7190
June 14, 1996
Dear Investor:
As you know, on May 20, 1996, Walton Street Capital Acquisition Co. II, L.L.C.
("Walton Street") announced an unsolicited offer to purchase up to
approximately 33% of the outstanding limited partnership interests ("Units") of
Balcor Pension Investors-III (the "Partnership") at a price of $130 per Unit.
In our letter to you dated May 29, 1996, we informed you that we were
expressing no opinion and remaining neutral with respect to Walton Street's
offer. While our position with respect to the offer has not changed, we wanted
to provide you with certain additional information that may be useful to you in
evaluating the offer.
On June 3, 1996, the Partnership received a non-binding proposal from
Heitman/JMB Advisory Corporation ("Heitman") to purchase all of the
Partnership's remaining real properties and mortgage loans. Inasmuch as this
proposal included certain terms and conditions which are not acceptable to the
Partnership, representatives of the General Partner spoke with representatives
of Heitman in an attempt to determine the viability of the Heitman proposal and
to request additional information on certain matters, including Heitman's
source of capital. On June 6, 1996, the Partnership delivered a non-binding
counterproposal to Heitman setting forth the Partnership's asking price for the
assets which would be available for sale, and the basic terms and conditions
upon which the Partnership would be agreeable to pursuing negotiations. As of
this time, Heitman has not responded to this counterproposal and accordingly,
the General Partner does not know whether or not the terms and conditions
thereof are acceptable to Heitman or whether there will be further
negotiations.
It must be kept in mind that even if Heitman and the Partnership proceed with
negotiations, the Heitman proposal is contingent on many factors including
among others Heitman's satisfactory due diligence review of the Partnership's
properties, the negotiation of a mutually acceptable purchase agreement and
Heitman's ability to obtain adequate capital to consummate the transaction.
Additionally, a sale of all or substantially all of the Partnership's assets
will require the approval of the holders of a majority of the outstanding
Units. If a contract for the sale of the assets is executed with Heitman, the
General Partner will attempt to obtain the necessary investor approval through
a proxy solicitation.
As a result of the significant contingencies and conditions stated above, there
can be no assurance that a sale to Heitman will ultimately be consummated or if
a sale is completed what the final terms will be. In fact there is a very
substantial risk that a sale will not be consummated. However, in the event
that a sale of the assets is consummated at the price contemplated in the
Partnership's counterproposal, the net proceeds from a sale to Heitman which
would be available for distribution to investors, when added to the available
proceeds of the potential sales described in our May 29 letter and Partnership
cash reserves, would be materially greater than the amount of the Walton Street
offer. Even in the event that the sales to Heitman and the other sale
<PAGE>
described in our May 29 letter are consummated, there can be no assurance what
actual dollar amount of distributions to the limited partners will be achieved.
Under the terms of Walton Street's offer, as revised, Walton Street cannot,
until June 27, 1996, purchase and pay for any Units tendered prior to that
time, and you may withdraw Units tendered to Walton Street at any time prior to
5:00 p.m. Eastern Standard Time on June 27, 1996. If you wish to withdraw any
Units tendered to Walton Street, you may do so by complying with the withdrawal
procedures set forth in Walton Street's offer. Your General Partner will
continue to act in the manner it believes to be in the best interests of the
limited partners.
Very truly yours,
/s/Thomas E. Meador
Thomas E. Meador, Chairman
Balcor Mortgage Advisors-II
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