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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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AMENDMENT NO. 3
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. 3 to the initial Tender Offer
Statement on Schedule 14D-9, dated December 2, 1999, as amended on December 21,
1999 and December 30, 1999 (as amended, the "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
Schedule 14D-9 and the Cover letters to Unit holders, dated December 2, 1999,
December 21, 1999, and December 30, 1999.
ITEM 2. TENDER OFFER OF THE BIDDER
This statement relates to a third unsolicited offer by ERP disclosed in
Amendment No. 2, dated December 23, 1999 ("AMENDMENT NO. 2"), to its Tender
Offer Statement on Schedule 14D-1, dated November 23, 1999, as amended on
December 15, 1999 (as amended, the "SCHEDULE 14D-1"), to purchase up to 35,190
Units at a price of $1,100 per Unit, in cash, less the amount of any
distributions declared or made with respect to the Units between December 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 ERP's Offer
to Purchase, dated November 23, 1999, the amendments to the Offer to Purchase,
dated December 15, 1999, and December 23, 1999, respectively, and the related
Letters of Transmittal (which collectively constitute the "THIRD ERP OFFER" and
are contained within the Schedule 14D-1 and Amendment No. 2 thereto).
Under the Third ERP Offer, ERP will not purchase Units unless a minimum
of 51% of the issued and outstanding Units are tendered to ERP. In addition, ERP
will only purchase 99% of the total number of Units tendered by each holder of
Units (a "UNITHOLDER") if ERP's purchase of all tendered Units would result in
there being less than 350 Unitholders. The Partnership has 35,200 Units issued
and outstanding held by approximately 2,100 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 Schedule 14D-9.
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THIRD MERGER PROPOSAL
On January 4, 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 $1,200 per Unit in cash (the
"THIRD 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 $1,200 per Unit
merger price, which amount will not be reduced by distributions declared or made
by the Partnership to Unitholders, including the $20 per Unit distribution
expected to be made by the Partnership to Unitholders in February 2000. The
Third Merger Proposal is subject to certain conditions, including the approval
of the merger and necessary amendments to the partnership agreement by the
holders of a majority of the Units. The Third 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 Third Merger Proposal.
The general partners of the Partnership intend to cause the Partnership to
distribute proxy materials to Unitholders to seek approval of the Third Merger
Proposal and related amendments to the Partnership's partnership agreement, and
presently anticipate that if all conditions to the Third Merger Proposal are
satisfied, consummation of the merger would occur in the first quarter of 2000.
However, there is no assurance that the Third Merger Proposal will be
consummated or that it will not be delayed.
ITEM 4. THE SOLICITATION OR RECOMMENDATION
Following receipt of the Third ERP Offer, The Krupp Corporation, a
Massachusetts corporation and the corporate general partner of the Partnership
(the "CORPORATE GENERAL PARTNER"), reviewed and considered the Third ERP Offer.
The Corporate General Partner has determined that the Third ERP Offer is not in
the best interests of the Unitholders, and recommends that Unitholders reject
the Third 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 Third Merger Proposal provides Unitholders with an
additional $120, or 10.9%, per Unit in cash over the Third ERP Offer, after
taking into account the $20 per Unit distribution expected to be made by the
Partnership in February 2000.1/ The Corporate General Partner believes that this
price differential is large enough to compel its recommendation of the Third
Merger Proposal. The Third Merger Proposal remains, however, 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, which is expected to be sought this quarter.
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1/ Because the record date for the distribution is February 1, 2000, ERP will
retain the $20 per Unit distribution, assuming the expiration of the Third
ERP Offer on January 21, 2000.
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(ii) In August 1999, an independent real estate valuation firm
prepared an appraisal of the properties owned by the Partnership, which
indicated to KR5 Acquisition a value per Unit of approximately $864, after
taking into account the Partnership's liabilities and other assets as of
September 30, 1999 and mortgage debt-related expenses. The Third Merger Proposal
represents an additional 41.2% per Unit in cash over the appraised value of the
Properties, after taking into account the anticipated February Partnership
distribution.
(iii) Unlike the case of the Third ERP Offer, the Third KR5
Proposal enables Unitholders to receive a $20 per Unit distribution in February
2000 in addition to the $1,200 per Unit to be paid in the merger, if
consummated.
(iv) The fact that the Third ERP Offer will only be made if
51% of the Units are tendered to ERP. Consequently, Unitholders who do not wish
to tender their Units to ERP will likely encounter increased difficulty in
selling their Units at a fair price in light of the already illiquid secondary
market for Units.
(v) The fact that ERP will only purchase 99% of the total
number of Units tendered by each Unitholder if ERP's purchase of all tendered
Units would result in there being less than 350 Unitholders. Consequently,
Unitholders may be forced to retain a minor interest in the Partnership which
will likely be difficult to sell and which will require the annual filing and
reporting of Schedule K-1 tax information by Unitholders.
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.*
7. Cover letter to Unit holders from the
Partnership dated December 30, 1999.*
8. Cover letter to Unit holders from the
Partnership dated January 4, 2000.
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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: January 4, 2000
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.*
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.*
7. Cover letter to Unit holders from the
Partnership dated December 30, 1999.*
8. Cover letter to Unit holders from the
Partnership dated January 4, 2000.
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* Previously filed.
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KRUPP REALTY LIMITED PARTNERSHIP - V
January 4, 2000
Dear Limited Partner:
On December 30, 1999, we advised you to wait for the response from KR5
Acquisition, L.L.C., an affiliate of ours, to ERP Operating Partnership's third
unsolicited offer to purchase all of the limited partnership interests of Krupp
Realty Limited Partnership - V for $1,100 per unit. KR5 has responded to ERP's
proposal by increasing KR5's offer to $1,200.00 PER UNIT IN CASH FOR ALL OF THE
OUTSTANDING UNITS. KR5's proposal will not be reduced by the $20.00 per unit
distribution payment to be made on February 14, 2000, as would likely occur
under ERP's proposal, netting you $120.00 more for each unit you own.
We recommend that you REJECT ERP's offer of $1,100 per unit and not
tender your units. This recommendation is based on the fact that the KR5
proposal would net each of you more per unit than ERP's offer.
Both the ERP proposal and the KR5 proposal are subject to conditions.
The KR5 proposal requires, among other things, the approval of the proposed
merger and necessary amendments to the partnership's partnership agreement by at
least 50.01% of the unit holders, which we expect to seek this quarter. The ERP
proposal requires that, before anyone can receive payment, at least 51% of the
units be tendered prior to the expiration date of ERP's offer.
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 ERP's most recent 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
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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.
