SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------------
SCHEDULE 14D-1
TENDER OFFER STATEMENT PURSUANT TO
SECTION 14(D)(1) OF THE SECURITIES EXCHANGE ACT OF 1934
UNDER THE SECURITIES EXCHANGE ACT OF 1934
AMENDMENT NO. 1
KRUPP REALTY FUND, LTD. - III
(Name of Subject Company)
KRF3 ACQUISITION COMPANY, L.L.C.,
KRF COMPANY, L.L.C., AND
THE KRUPP FAMILY LIMITED PARTNERSHIP - 94
(Bidders)
UNITS OF LIMITED PARTNERSHIP INTERESTS
(Title of Class of Securities)
501128 10 2
(CUSIP Number of Class of Securities)
SCOTT D. SPELFOGEL
THE BERKSHIRE GROUP
ONE BEACON STREET
BOSTON, MASSACHUSETTS 02108
(617) 574-8385
WITH COPIES TO:
JAMES M. DUBIN
PAUL, WEISS, RIFKIND, WHARTON & GARRISON
1285 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10019-6064
TELEPHONE: (212) 373-3000
(Name, Address and Telephone Number of Persons Authorized
to Receive Notices and Communications on Behalf of Bidders)
<PAGE>
2
This Amendment No. 1, dated May 20, 1999 (the "Amendment"), to the
Tender Offer Statement on Schedule 14D-1 originally filed with the Securities
and Exchange Commission on May 14, 1999, attaches (a) information furnished to
persons making oral solicitations on behalf of KRF 3 Acquisition Company,
L.L.C., a Delaware limited liability company (the "Purchaser"), in connection
with the Offer (as defined below) and (b) solicitation materials sent to holders
of Units (as defined below) ("Unitholders") in connection with the Offer.
This Amendment and the Tender Offer Statement on Schedule 14D-1
originally filed with the Securities and Exchange Commission on May 14, 1999
relate to a tender offer by the Purchaser, to purchase any and all outstanding
investor limited partnership interests (the "Units") of Krupp Realty Fund, Ltd.
- - III, a limited partnership organized under the laws of Massachusetts, for $550
per Unit, in cash, less the aggregate amount of distributions per Unit, if any
made after May 14, 1999, without interest, upon the terms and subject to the
conditions set forth in the Offer to Purchase and the Supplement to the Offer to
Purchase, each dated as of May 14, 1999, and in the related Agreement of
Assignment and Transfer (which together constitute the "Offer").
<PAGE>
3
ITEM 1. MATERIAL TO BE FILED AS EXHIBITS.
Item 11 of the Schedule 14D-1is hereby amended and supplemented by
adding the following exhibits thereto:
(a)(6) Suggested scripts distributed to persons engaged to solicit
Unitholders by telephone
(a)(7) Postcards sent to certain Unitholders
<PAGE>
4
SIGNATURES
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this amendment is true, complete and correct.
Dated: May 20, 1999
KRF3 Acquisition Company, L.L.C.
By: KRF Company, L.L.C.,
its sole member
By: The Krupp Family Limited
Partnership - 94,
its sole member
By: /s/ Douglas Krupp
-----------------
Name: Douglas Krupp
Title: General Partner
KRF Company, L.L.C.
By: The Krupp Family Limited
Partnership - 94,
its sole member
By: /s/ Douglas Krupp
-----------------
Name: Douglas Krupp
Title: General Partner
The Krupp Family Limited Partnership-94
By: /s/ Douglas Krupp
-----------------
Name: Douglas Krupp
Title: General Partner
<PAGE>
5
EXHIBIT INDEX
Exhibit No. Description
(a)(6) Suggested scripts distributed to persons engaged to solicit
Unitholders by telephone
(a)(7) Postcards sent to certain Unitholders
Hello,
I am calling on behalf of the Krupp Funds Group Limited Partnership regarding
your investment in Krupp Realty Fund, Ltd.-III and the tender offer to purchaser
your units at $550.00 each. We want to make sure you received the material and
answer any questions. Please review the material and if you choose to accept,
return the yellow application to Krupp Funds Group Limited Partnership using the
enclosed business reply envelope. Any questions, please do not hesitate to call.
OUR TOLL FREE NUMBER IS 1-800-605-6774. If we don't hear from you within two
days, we'll give you a call and answer your questions.
Thank you and have a nice day.
<PAGE>
INVESTOR SCRIPT
KRUPP REALTY FUND, LTD. - III ACQUISITION BY KRF3 ACQUISITON
COMPANY, L.L.C.
Hello, my name is _____________ and I am calling in regard to the letter you
received from KRF3 Acquisition Company. As you know, the company is seeking to
buy all of your Investor Limited Partnership Interests in Krupp Realty Fund III
for $550 per Unit in cash.
If I could take a minute of your time, I would like to highlight a few very
important points and answer any questions you may have pertaining to the offer.
COMPARE OUR OFFER OF $550 TO MADISON LIQUIDITY INVESTORS OFFER OF $425
Recently, you received an offer from Madison Liquidity Investors of $425 per
Unit, which we believe is inadequate. Our offer price is $550 per Unit, which is
29% higher than the Madison offer. In addition, we will pay the $50 transfer
fee, which Madison has not included in their offer.
STATUS OF FUND III'S PROPERTIES
The Apartment complexes owned by the Partnership are:
(1) facing recent increased competition from newly constructed and
renovated residential units in their markets;
(2) as a result, substantial capital improvements may be required for
the properties to compete in this changing market.
IMPLICATIONS OF FUND III'S ADDITIONAL CAPITAL IMPROVEMENT REQUIREMENTS The
implications to Fund III of the additional capital improvement requirements are:
(1) substantial capital will be required for the properties, which
can be raised by:
- additional bank borrowings, which will result in higher
leverage for the Fund:
- and, the discontinuation of future cash distributions by the
Partnership to Unitholders
(2) The Partnership's ability to finance all required improvements is
uncertain.
Consequently, this offer presents an opportunity for Unitholders who do not want
to continue to participate in the risks associated with the ownership of
multifamily properties, including the risks associated with these recent
developments in the Partnership's markets.
OPPORTUNITY TO ELIMINATE UNCERTAINTIES REGARDING YOUR UNITS
By selling your Units today, you will eliminate the uncertainties relating to
the amount you might receive on future liquidation of the Partnership, which
will depend upon:
(1) the then-current markets for the properties, as well as
(2) the amounts required to be reserved to satisfy contingent
liabilities associated with these sales.
Furthermore, by selling the Units for cash now, you will have the option to
invest your assets into alternative and potentially more liquid investments.
<PAGE>
THERE IS NO FORMAL TRADING MARKET FOR YOUR UNITS
Because there is no formal trading market for your Units, they can be difficult
to sell on any secondary market. Our offer provides you with the opportunity to:
(1) immediately sell your Units for what we believe is a fair price
without the commissions or broker's fee of a secondary market
sale, and
(2) we will pay the $50 transfer fee charged by the Partnership
usually paid by the seller.
UNITHOLDERS WILL BE PAID PROMPTLY UPON TENDER OF THEIR UNITS
Unitholders who choose to tender their Units to us will be paid promptly. If you
wish to accept our offer, I can help you complete the necessary forms. Our offer
will expire at midnight New York City time on June 11, 1999, unless the offer is
extended.
OTHER
Do you have any questions at this time?
May I help you complete the necessary forms?
If you have any questions at a later date or need assistance please call us at
800-605-6774 and we will be happy to expedite this process for you.
Thank you for your time!
FRONT
We, the Information Agent, spoke to you a few days ago regarding your investment
in Krupp Realty Fund, Ltd.-III. You conveyed to us that you were considering
tendering your units for $550 each. As of today, we have not received the yellow
application to tender your units.
* Have you lost or misplaced the application to tender at $550?
* Do you still have unanswered questions?
* Are you confused?
If you answered yes to one or all of these questions, please pick up the phone
and call us toll free at 1-800-605-6774.
Please don't wait.
Thank you.
Krupp Funds Group Limited Partnership
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<PAGE>
FRONT
We have been trying to reach you on behalf of our client, Krupp Funds Group
Limited Partnership. Kindly telephone us toll free at 1-800-605-6774.
Thank you.
Georgeson & Company Inc.
- --------------------------------------------------------------------------------
BACK
PROXY SOLICITATIONS
ANALYTICAL SERVICES
MERGERS & ACQUISITIONS
INVESTOR RELATIONS IMPORTANT INFORMATION
ON REVERSE SIDE
CORPORATE GOVERNANCE
COUNSELING
INVESTOR TARGETING
COMMUNICATIONS PROGRAMS
INTERNET VOTING
TOUCH TONE VOTING
Georgeson
& Company Inc.
--------------
www.georgeson.com
