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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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AMENDMENT NO. 1
TO
SCHEDULE 14D-9
Solicitation/Recommendation Statement
Pursuant to Section 14(d)(4) of the
Securities Exchange Act of 1934
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KRUPP REALTY LIMITED PARTNERSHIP - V
(Name of Subject Company)
KRUPP REALTY LIMITED PARTNERSHIP - V
(Name of Person Filing Statement)
Limited Partnership Units
(Title of Class of Securities)
501128 30 0
(CUSIP Number of Class of Securities)
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Douglas S. Krupp
The Krupp Corporation
One Beacon Street
Boston, Massachusetts 02108
(617) 523-7722
(Name, Address and Telephone Number of Person
Authorized to Receive Notice and Communications
on Behalf of the Person(s) filing Statement)
Copy to:
Scott D. Spelfogel, Esq. James M. Dubin, Esq.
The Berkshire Group Paul, Weiss, Rifkind, Wharton & Garrison
One Beacon Street 1285 Avenue of the Americas
Boston, Massachusetts 02108 New York, New York 10019-6064
(617) 574-8385 (212) 373-3000
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This statement constitutes Amendment No. 1 to the initial Tender Offer
Statement on Schedule 14D-9, dated December 2, 1999 (the "Initial Schedule
14D-9"), of Krupp Realty Limited Partnership - V (the "Partnership") relating to
the offer of ERP Operating Limited Partnership, an Illinois limited partnership
("ERP"), to purchase units of investor limited partnership interest (the
"Units") of the Partnership. The item numbers and responses thereto are set
forth below in accordance with the requirements of Schedule 14D-9.
Items 1. - 9.
Except as follows, incorporated by reference from the Partnership's
Initial Schedule 14D-9 and Cover letter to Unitholders, each dated December 2,
1999.
Item 2. Tender Offer of the Bidder
This statement relates to a second unsolicited offer by ERP disclosed
in Amendment No. 1, dated December 15, 1999 ("Amendment No. 1"), to its Tender
Offer Statement on Schedule 14D-1, dated November 23, 1999 (the "Initial
Schedule 14D-1"), to purchase up to 35,190 Units at a price of $875 per Unit, in
cash, less the amount of any distributions declared or made with respect to the
Units between November 23, 1999 and January 21, 2000, or such other date to
which its offer may be extended, upon the terms and subject to the conditions
set forth in the ERP's Offer to Purchase, dated November 23, 1999, the amendment
to the Offer to Purchase, dated December 15, 1999, and the related Letter of
Transmittal (which collectively constitute the "Second ERP Offer" and are
contained within the Initial Schedule 14D-1 and Amendment No. 1 thereto). The
Partnership has 35,200 Units issued and outstanding held by approximately 2,100
holders of Units (the "Unitholders") as of December 31, 1998. An affiliate of
ERP already owns an interest in ten Units. If ERP were to purchase the 35,190
Units being offered for, it and its affiliates would own 100% of the outstanding
Units.
Item 3. Identity and Background
(a) - (b) The following language should be read together with "Item 3.
Identity and Background" of the Initial Schedule 14D-9.
Second Merger Proposal
On December 21, 1999, the Partnership received a revised acquisition
proposal from KR5 Acquisition, L.L.C., a newly formed Delaware limited liability
company affiliated with the general partners of the Partnership ("KR5
Acquisition"), to acquire outstanding Units for $1,000 per Unit in cash (the
"Second Merger Proposal"). The proposed transaction would be structured as a
merger of the Partnership into KR5 Acquisition, in which all outstanding
partnership interests other than those held by affiliates of the general
partners and certain current limited partners who will be reinvesting their
Units in KR5 Acquisition (the "Investors"), would receive the $1,000 per Unit
merger price, which amount will not be reduced by distributions declared or made
by the Partnership to holders of Units, including the $20 per Unit distribution
expected to be made by the Partnership to Unitholders in February 2000. The
Second Merger Proposal is subject to certain conditions,
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including the approval of the merger and necessary amendments to the partnership
agreement by the holders of a majority of the Units. The Second Merger Proposal
is not subject to a financing condition. The Investors, who own approximately
11% of the outstanding Units, have agreed to vote in favor of the Second Merger
Proposal. The general partners of the Partnership intend to cause the
Partnership to distribute proxy materials to Unitholders to seek approval of the
Second Merger Proposal and related amendments to the Partnership's partnership
agreement, and presently anticipate that if all conditions to the Second Merger
Proposal are satisfied, consummation of the merger would occur in the first
quarter of 2000. However, there is no assurance that the Second Merger Proposal
will be consummated or that it will not be delayed.
Item 4. The Solicitation or Recommendation
Following receipt of the Second ERP Offer, The Krupp Corporation, a
Massachusetts corporation and the corporate general partner of the Partnership
(the "Corporate General Partner"), reviewed and considered the Second ERP Offer.
The Corporate General Partner has determined that the Second ERP Offer is not in
the best interests of the Unitholders, and recommends that the holders of the
Units reject the Second ERP Offer and not tender their Units pursuant thereto.
In reaching its conclusion described in the paragraph above, the
Corporate General Partner considered a number of factors, including the
following:
(i) The Second Merger Proposal provides Unitholders with an
additional $165, or 19.3%, per Unit in cash over the Second ERP Offer, after
taking into account the $20 per Unit distribution expected to be made by the
Partnership in February 2000. 1/ Although the Second Merger Proposal is subject
to certain conditions, including the approval of the proposed merger and
necessary amendments to the Partnership's partnership agreement by the holders
of a majority of the Units, and is not expected to occur until the first quarter
of next year, the Corporate General Partner believes that the price differential
between the two proposals is large enough to compel its recommendation of the
Second Merger Proposal.
(ii) In August 1999, an independent real estate valuation firm
prepared an appraisal of the properties owned by the Partnership, which
indicated a value per Unit of approximately $864, after taking into account the
Partnership's liabilities and other
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1/ ERP will be able to deduct the anticipated $20 per Unit Partnership
distribution to be made in February 2000 from its offer amount, so that
Unitholders would receive only $855 per Unit from ERP, and because the
record date for the distribution is February 1, 2000, ERP will retain
the $20 per Unit distribution, assuming the expiration of the Second
ERP Offer on January 21, 2000. Although it is not entirely clear to the
Corporate General Partner, because of the $40 Partnership distribution
declared by the Partnership in December 1999, $20 of which would be
paid in February 2000 and $20 of which would be paid in August 2000,
the net offer price to Unit holders under the Second ERP Offer could be
as low as $835.
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assets as of September 30, 1999 and mortgage debt-related expenses. The Second
Merger Proposal represents an additional 18% per Unit in cash over the appraised
value of the Partnership's properties, after taking into account the anticipated
February Partnership distribution.
(iii) The per Unit price reflected in the Second Merger
Proposal will not be reduced by distributions declared or made by the
Partnership to such holders. In addition, unlike the case of the Second ERP
Offer, the Second KR5 Proposal enables Unitholders to receive a $20 per Unit
distribution in February 2000 in addition to the $1,000 per Unit to be paid in
the merger, if consummated.
Item 7. Certain Negotiations and Transactions by the Subject Company
The following language should be read together with "Item 7. Certain
Negotiations and Transactions by the Subject Company" in the Initial Schedule
14D-9.
(a) - (b) The words "the Purchaser," "Merger Proposal" and "ERP Offer"
should be read as "ERP," "Merger Proposals" and "ERP Offers," respectively.
Item 8. Additional Information to be Furnished
This document does not constitute a solicitation of proxies or consents
from holders of Units. Any such solicitation that may be made by the Partnership
will be made only pursuant to separate materials complying with the requirements
of Section 14(a) of the Securities and Exchange Act of 1934, as amended, and the
rules and regulations thereunder.
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Item 9. Material to be Filed as Exhibits
1. Cover letter to Unit holders from the Partnership dated
December 2, 1999.*
2. The Amended Agreement, dated as of July 27, 1983, by and among
The Krupp Company Limited Partnership II and The Krupp
Corporation, as general partners, The Krupp Company Limited
Partnership II, as the Original Limited Partner, and those
persons who have been admitted to the Partnership as Investor
Limited Partners pursuant to the terms of the such Agreement.*
3. Park Place Property Management Agreement, dated as of January
1, 1994, between the Partnership and Berkshire Realty
Enterprises Limited Partnership.*
4. Amendment to Park Place Property Management Agreement between
the Partnership and Berkshire Realty Enterprises Limited
Partnership, dated as of January 1, 1996.*
5. Century II Apartments Property Management Agreement, dated as
of January 1, 1996, between the Partnership and Berkshire
Realty Enterprises Limited Partnership.*
6. Cover letter to Unit holders from the Partnership dated
December 21, 1999.
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* Previously filed.
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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: December 21, 1999
KRUPP REALTY LIMITED PARTNERSHIP - V
By: The Krupp Corporation, a
general partner
By: /s/ Douglas S. Krupp
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Name: Douglas S. Krupp
Title: President and Co-Chairman
of the Board
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EXHIBIT INDEX
Exhibit Description Page
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1. Cover letter to Unit holders from the
Partnership dated December 2, 1999.*
2. The Amended Agreement, dated as of
July 27, 1983, by and among The Krupp
Company Limited Partnership II and The
Krupp Corporation, as general partners, The
Krupp Company Limited Partnership II, as
the Original Limited Partner, and those
persons who have been admitted to the
Partnership as Investor Limited Partners
pursuant to the terms of the such Agreement
Form of Property Management Agreement
between the Partnership and Berkshire
Property Management Company.*
3. Park Place Property Management
Agreement, dated as of January 1, 1994,
between the Partnership and Berkshire
Realty Enterprises Limited Partnership.*
4. Amendment to Park Place Property
Management Agreement between the
Partnership and Berkshire Realty Enterprises
Limited Partnership, dated as of January 1,
1996.*
5. Century II Apartments Property Management
Agreement, dated as of January 1, 1996,
between the Partnership and Berkshire
Realty Enterprises Limited Partnership.*
6. Cover letter to Unit holders from the
Partnership dated December 21, 1999.
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* Previously filed.
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Exhibit 6
KRUPP REALTY LIMITED PARTNERSHIP - V
December 21, 1999
Dear Limited Partner:
The Krupp Corporation (the "Corporate General Partner") has reviewed
two new offers for all of the limited partnership interest ("Units") of Krupp
Realty Limited Partnership - V (the "Partnership"). On December 15, 1999, ERP
Operating Partnership, an Illinois limited partnership ("ERP"), made a second
unsolicited tender offer to purchase all Partnership Units for $875 per Unit in
cash, less the amount of any distributions made or declared between November 23,
1999 and January 21, 2000 (the "Second ERP Offer"). In response to the Second
ERP Offer, KR5 Acquisition L.L.C., an affiliate of the Corporate General
Partner, also made a second acquisition proposal to acquire all of the
outstanding Units for $1,000 per Unit in cash (the "Second KR5 Proposal"). The
Second KR5 Proposal would not be reduced by the $20 Partnership distribution
payment expected to be made in February 2000.
The Corporate General Partner recommends that the holders of the Units
REJECT the Second ERP Offer of $875 and not tender their Units. The Corporate
General Partner's recommendation is based on the fact that KR5 Proposal, if
consummated, would net each investor $165 more per Unit than the Second ERP
Offer. That is, Unit holders would receive $1,000 under the Second KR5 Proposal
plus the $20 per Unit February 2000 Partnership distribution, for a total of
$1,020, compared with $855 under the Second ERP Offer as a result of the
deduction from such offer of the $20 per Unit Partnership distribution in
accordance with the terms of such offer. Because the record date for the
distribution is February 1, 2000, ERP will retain the $20 per Unit distribution,
assuming the expiration of the Second ERP Offer on January 21, 2000.
Although it is not entirely clear to the Corporate General Partner,
because of the $40 per Unit Partnership distribution declared by the Partnership
in December 1999, $20 of which would be paid in February 2000 and $20 of which
would be paid in August 2000, the net offer price to Unit holders under the
Second ERP Offer could be as low as $835.
Although the Second KR5 Proposal is subject to certain conditions,
including the approval of the proposed merger and necessary amendments to the
Partnership's partnership agreement by the holders of a majority of the Units,
and is not expected to occur until the first quarter of next year due to the
proxy filing requirements and necessity of the unitholder vote, the Corporate
General Partner believes that the price differential between the two proposals
is large enough to compel the rejection of the Second ERP Offer.
For some Unitholders, the need to liquidate their investment in the
Partnership as soon as possible and for more certainty of consummation may
justify electing to receive the 19.3% discount represented by the Second ERP
Offer in comparison to the
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Second KR5 Proposal. For other Unitholders, however, these factors do not
outweigh the benefits of receiving a higher price for their Units.
Enclosed is a copy of the Partnership's amended Statement on Schedule
14D-9 which has been filed with the Securities and Exchange Commission and sets
forth the Partnership's response to the Second ERP Offer. You are advised to
carefully read the amended Statement on Schedule 14D-9.
Please do not hesitate to call our Investor Communication
representatives at 1-800-255-7877 for assistance in any Partnership matter.
Sincerely yours,
/s/ Douglas S. Krupp
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Douglas S. Krupp
The Krupp Corporation,
a General Partner
This document does not constitute a solicitation of proxies or consents from
holders of Units. Any such solicitation that may be made by the Partnership will
be made only pursuant to separate materials complying with the requirements of
Section 14(a) of the Securities and Exchange Act of 1934, as amended, and the
rules and regulations thereunder.
