SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
SCHEDULE 14D-9
SOLICITATION/RECOMMENDATION STATEMENT PURSUANT TO
SECTION 14(D)(4) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 1)
MCNEIL REAL ESTATE FUND XX, L.P.
(Name of Subject Company)
MCNEIL INVESTORS, INC.
MCNEIL PARTNERS, L.P.
(Name of Person Filing Statement)
UNITS OF LIMITED PARTNERSHIP INTEREST
(Title of Class of Securities)
NOT APPLICABLE
(CUSIP Number of Class of Securities)
RON K. TAYLOR
PRESIDENT
MCNEIL INVESTORS, INC.
13760 NOEL ROAD, SUITE 600
DALLAS, TEXAS 75240
(972) 448-5800
(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications on Behalf of the Person Filing Statement)
with copies to:
MARTHA E. MCGARRY, ESQ. W. SCOTT WALLACE, ESQ.
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP HAYNES & BOONE, LLP
FOUR TIMES SQUARE 901 MAIN STREET
NEW YORK, NEW YORK 10036 DALLAS, TEXAS 75202
(212) 735-3000 (214) 651-5000
McNeil Real Estate Fund XX, L.P., a California limited partnership
(the "Partnership"), hereby amends and supplements its
Solicitation/Recommendation Statement on Schedule 14D-9 (the "Statement")
initially filed with the Securities and Exchange Commission on January 25,
2000, relating to the unsolicited tender offer (the "Bond Offer") described
in a Schedule 14D-1 filed with the Securities and Exchange Commission (the
"Commission") on January 13, 2000, as amended by Amendment No. 1 thereto
filed on January 18, 2000, as further amended by Amendment No. 2 thereto
filed on January 28, 2000 (as amended, the "Schedule 14D-1"), by Bond
Purchase, LLC, a Missouri limited liability company ("Bond Purchase").
ITEM 2. TENDER OFFER OF THE BIDDER.
Item 2 is hereby amended and supplemented as follows:
On January 26, 2000, Bond Purchase released the following press
release:
Bond Purchase, L.L.C. Announces Increased Per Unit
Price of $110 for Tender Offer for
Limited Partner Units of McNeil Real
Estate Fund XX, L.P.
KANSAS CITY, Mo., Jan. 26 /PRNewswire/ -- Bond Purchase, L.L.C.
today announced that it has increased its cash tender offer price
for any and all outstanding limited partner units of McNeil Real
Estate Fund XX, L.P. (the "Partnership") from $100 per unit to $110
per unit.
Bond Purchase commenced its tender offer on January 13, 2000. The
offer will expire at 12 p.m. EDT on February 11, 2000, unless
extended.
Bond Purchase's offer provides the Partnership's limited partners a
$10 per unit increase, representing a 10% increase over the
original cash tender offer price and a 4.8% premium over the price
to be paid pursuant to the merger proposed by the general partner
of the Partnership, McNeil Partners, L.P. pursuant to an
acquisition agreement entered into by McNeil Partners and
WXI/McNeil Realty, L.L.C. (the "Whitehall Transaction"). McNeil
Partners recently announced an increase of the price to be paid in
the Whitehall Transaction from $92 to $105 per unit in response to
Bond Purchase's tender offer. McNeil Partners has scheduled a
special meeting of limited partners of the Partnership to vote on
the Whitehall Transaction for Wednesday, February 2, 2000.
Bond Purchase said that the offer is conditioned upon, among other
things, the tender to Bond Purchase of approximately 25% of the
Partnership's limited partner units and the Whitehall Transaction
not being approved.
All limited partners who have previously tendered will
automatically receive $110 per unit if the offer is consummated.
Georgeson & Co. is serving as information agent for the offer.
This press release is neither an offer to purchase nor a
solicitation of an offer to sell any shares of Bond Purchase. The
offer is made solely by Bond Purchase's Offer to Purchase dated
January 13, 2000 and the related letter of transmittal.
For more information, Bond Purchase, L.L.C., 816-421-4670, or fax,
816-221-1829.
SOURCE Bond Purchase, L.L.C.
CONTACT: Bond Purchase, L.L.C., 816-421-4670, or fax, 816-221-1829
* * * * *
ITEM 4. THE SOLICITATION OR RECOMMENDATION.
Item 4 is hereby amended and supplemented as follows:
As described in the press release set forth in Item 2 above, Bond
Purchase has increased its tender offer price for Units of the Partnership
to $110 per Unit (the "Increased Bond Offer").
THE SPECIAL COMMITTEE OF THE BOARD OF DIRECTORS OF MCNEIL
INVESTORS, INC. (THE "SPECIAL COMMITTEE") HAS CAREFULLY CONSIDERED THE
INCREASED BOND OFFER AND HAS DETERMINED THAT THE INCREASED BOND OFFER DOES
NOT REPRESENT A "SUPERIOR ACQUISITION PROPOSAL", AS COMPARED TO THE REVISED
WHITEHALL TRANSACTION WITH RESPECT TO THE PARTNERSHIP, AND HAS RECOMMENDED
TO THE BOARD OF DIRECTORS THAT THE BOARD REJECT THE INCREASED BOND OFFER
AND REAFFIRM ITS RECOMMENDATION OF THE REVISED WHITEHALL TRANSACTION TO THE
HOLDERS OF UNITS OF THE PARTNERSHIP. THE BOARD OF DIRECTORS HAS ACCEPTED
THE RECOMMENDATION OF THE SPECIAL COMMITTEE AND RESOLVED TO REJECT THE
INCREASED BOND OFFER AND TO REAFFIRM ITS RECOMMENDATION THAT HOLDERS
APPROVE THE WHITEHALL TRANSACTION, AS REVISED TO DATE.
REASONS FOR THE SPECIAL COMMITTEE'S RECOMMENDATION
On January 26, 2000, after the Special Committee's review of the
Bond Offer and the revised Whitehall Transaction and its rejection of the
Bond Offer, Bond Purchase announced the Increased Bond Offer.
After learning of the Increased Bond Offer late in the day on
Wednesday, January 26, 2000, the Special Committee sought to obtain a copy
of the Bond Purchase announcement, which it received on Thursday morning,
January 27. During the day of January 27, the Special Committee consulted
with its counsel and its financial advisor regarding the Increased Bond
Offer and the comparison of the revised Whitehall Transaction and the
Increased Bond Offer. The Special Committee directed its counsel to contact
Bond Purchase by telephone to request that Bond Purchase specifically
respond to previous requests from the Special Committee that Bond Purchase,
among other things, provide its financial statements to the Special
Committee and to Holders of Units in connection with their decision of
whether or not to tender to Bond Purchase. Counsel for the Special
Committee thereupon spoke by telephone with Mr. David L. Johnson, the
representative of Bond Purchase, and Mr. Rob Thompson, counsel to Bond
Purchase. Counsel for Bond Purchase advised that Bond Purchase would
respond only to written requests from the Special Committee, and would do
so only in writing. Accordingly, on Thursday evening, January 27, counsel
sent a letter on behalf of the Special Committee, setting forth its
requests. The text of the Special Committee's letter of January 27, 2000 is
set forth hereafter.
* * * * *
January 27, 2000
Via Facsimile
Mr. David L. Johnson
Bond Purchase, LLC
1100 Main, Suite 2100
Kansas City, MO 64105
Re: McNeil Real Estate Fund XX, L.P.
Dear Mr. Johnson:
This letter will confirm our telephone conversation of today with
you and your counsel, in which your counsel advised that you would only
respond, in writing, to written questions from the Special Committee.
As we explained, the Special Committee has today received a copy of
yesterday's press release by Bond Purchase LLC, in which you announced that
Bond Purchase has increased its tender offer price for Fund XX to $110 per
Unit. The Special Committee will be meeting with its counsel and financial
advisor tomorrow to determine what its response will be to your increased
offer, and prior to that meeting the Special Committee would like to ask
you once again for your response to certain of the questions posed to you
in paragraphs 1, 3 and 4 of my letter to you of January 12, 2000, which
remain unanswered. Specifically, we would like to be advised of your plans
with respect to any holders of Units in Fund XX which are not tendered to
you, and would like to receive current financial statements of Bond
Purchase.
When we spoke, you stated that you would respond to our requests by
1:00 P.M. Kansas City time on January 28, 2000, and we look forward to a
response by that time.
Very truly yours,
/s/ Ralph C. Walker
Ralph C. Walker
* * * * *
The Special Committee also directed its counsel to contact
representatives of McNeil Partners and WXI/McN Realty by telephone, to
ascertain whether either had any response to the Increased Bond Offer which
it wished the Special Committee to consider in connection with its
deliberations. On the evening of January 27, 2000, counsel to the Special
Committee spoke to a representative of McNeil Partners, who advised that
McNeil Partners did not at that time intend to increase further the price
offered in the Whitehall Transaction. On the morning of January 28, 2000,
counsel to the Special Committee spoke by telephone with a representative
of WXI/McNeil Realty, who stated that WXI/McN Realty had no intention at
that time of increasing further the proposed merger consideration to the
Holders.
Late in the morning (California time) on January 28, the Special
Committee met by telephone with its counsel and its financial advisor and
reviewed the Increased Bond Offer, the responses from McNeil Partners and
WXI/McN Realty and a letter received during the meeting from Bond Purchase,
responding to the Special Committee's letter of January 27, 2000.
In its deliberations, the Special Committee again reviewed the
entire background of the Whitehall Transaction, including (a) the origin of
the provision in the Limited Partnership Agreement of the Partnership that
McNeil Partners must liquidate the Partnership's properties and terminate
the Partnership by December 31, 1999; (b) the September 1998 settlement of
class action litigation which included a commitment by McNeil Partners to
market the McNeil Partnerships, including the Partnership, through a fair
and impartial bidding process overseen by a national investment banking
firm, and the subsequent review and approval by counsel to the plaintiffs
in the class action, with the assistance of an independent advisor, of the
allocations made pursuant to the Whitehall Transaction; (c) the advice of
PaineWebber Incorporated, the financial advisor to the McNeil Partnerships,
that the most favorable price for the McNeil Partnerships would likely be
achieved by marketing the McNeil Partnerships, together with the assets of
McNeil Partners and its affiliated entities, on an all-or-none basis; (d)
the 15-month national bidding process conducted by PaineWebber; (e) the
extensive negotiation of the Master Agreement with WXI/McN Realty, in which
the Special Committee and its counsel and financial advisor participated
actively; (f) the fairness opinions and opinions regarding allocation
rendered by Stanger & Co.; and (g) the review of Stanger's opinions and the
separate fairness opinions of Eastdil Realty Company, the Special
Committee's independent financial advisor.
The Special Committee then reviewed various aspects of the
Increased Bond Offer which it had previously questioned, including (h) the
fact that, despite repeated requests, Bond Purchase had not provided its
financial statements to the Special Committee and to the Holders, which if
available would permit the Holders to evaluate fully the financial
condition of Bond Purchase in determining whether or not to retain their
Units; (i) the fact that a general partner's financial statements are
universally considered material relevant information to persons seeking to
make an investment decision regarding a limited partner interest; (j) the
fact that if the Holders do not approve the Whitehall Transaction (1) the
Partnership's mortgage debt may be accelerated and a prepayment penalty may
be payable; (2) the Partnership may be obligated to pay a break-up fee; (3)
the Partnership would be obligated to pay substantial deferred management
fees immediately and (4) the Partnership may have insufficient cash to fund
all such obligations, in which event the value of the Units of Holders who
do not tender to Bond Purchase may be diminished; (k) the fact that Bond
Purchase may be obligated to expend substantial resources in connection
with its tender offers for McNeil Midwest Properties, Hearth Hollow and
Regency North as well as the Partnership; and (l) the statement by Bond
Purchase in its January 28 letter that it had no plans with respect to
Holders who wished to retain their Units, and the absence of any commitment
with respect to Holders who for any reason did not or could not tender
their Units to Bond Purchase, but who did not in fact wish to retain their
Units.
After careful consideration of the above-described factors, the
Special Committee on Friday afternoon, January 28, 2000, determined that
the Increased Bond Offer did not constitute a "Superior Acquisition
Transaction" and therefore that it could not endorse the Improved Bond
Offer. The Special Committee recommended to the Board of Directors that it
reject the Improved Bond Offer and reaffirm its recommendation of the
Whitehall Transaction, as revised to date. The Special Committee also
stated that it would continue to monitor developments, and would evaluate
any material changes which may occur prior to the special meeting of
limited partners of the Partnership scheduled for February 2, 2000.
On January 28, 2000, Bond Purchase filed with the Commission an
amendment to its Schedule 14D-1 which was designated as Amendment No. 1 but
which appears intended to be Amendment No. 2. The amendment included a copy
of the press release and form of letter to Holders announcing the Improved
Bond Offer, but did not include any financial statements of Bond Purchase.
On January 31, 2000, the Board of Directors of McNeil Investors
resolved that it had accepted the recommendation of the Special Committee
and resolved to reject the Increased Bond Offer and reaffirm its
recommendation that the Holders approve the Whitehall Transaction, as revised
to date.
ITEM 8. ADDITIONAL INFORMATION TO BE FURNISHED.
Item 8 is hereby amended and supplemented as follows:
The information contained in Proxy Statement Supplement of the
Partnership dated January 25, 2000, is incorporated herein by reference in
its entirety.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
Item 9 is hereby amended and supplemented as follows:
(a)(6) Press release dated January 29, 2000, issued by McNeil
Partners and the Partnership
(a)(7) Letter from Bond Purchase LLC dated January 28, 2000
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 29, 2000 McNEIL INVESTORS, INC.
By: /s/ Ron K. Taylor
Name: Ron K. Taylor
Title: President
McNEIL PARTNERS, L.P.
By: McNeil Investors, Inc.
Its: General Partner
By: /s/ Ron K. Taylor
Name: Ron K. Taylor
Title: President
EXHIBIT INDEX
(a)(6) Press release dated January 29, 2000, issued by McNeil
Partners and the Partnership
(a)(7) Letter from Bond Purchase LLC dated January 28, 2000
Exhibit (a)(6)
SPECIAL COMMITTEE OF MCNEIL INVESTORS, INC.
ANNOUNCES REJECTION OF INCREASED OFFER FOR
MCNEIL REAL ESTATE FUND XX, L.P.
BY BOND PURCHASE, L.L.C.
DALLAS, Texas, January 29, 2000 - The Special Committee of the
Board of Directors of McNeil Investors, Inc., which is the general partner
of McNeil Partners, L.P., which is in turn the General Partner of McNeil
Real Estate Fund XX, L.P. (the "Partnership"), announced today that it had
determined to recommend to the Board of Directors of McNeil Investors, Inc.
that it reject an increase cash tender offer from Bond Purchase, LLC and
reaffirm its recommendation that limited partners of the Partnership
approve the Whitehall transaction. On January 26, 2000, Bond Purchase
announced that it was increasing its tender offer to $110 per Unit. The
Special Committee said it had considered carefully the increased offer from
Bond Purchase and had again requested information from Bond Purchase
regarding certain aspects of its offer, including a request that Bond
Purchase provide its financial statements to the limited partners to permit
all those considering its tender offer to evaluate fully whether or nor to
retain their investments. By letter received yesterday, Bond Purchase again
declined to comply with the request, and so the Special Committee
determined that it could not endorse the increased offer from Bond
Purchase. The Special Committee also stated that it would continue to
monitor developments, and would evaluate any material changes which may
occur prior to the special meeting of limited partners scheduled for
February 2, 2000.
On June 25, 1999, McNeil Partners, L.P. and WXI/McN Realty
L.L.C., an affiliate of Whitehall Street Real Estate Limited Partnership
XI, a real estate investment fund managed by Goldman, Sachs & Co., entered
into an acquisition agreement whereby the Whitehall affiliate will acquire
by merger nineteen real estate limited partnerships operated by McNeil
Partners, L.P. and Robert A. McNeil, including the Partnership (the
"Whitehall transaction"). The Whitehall transaction is described in detail
in the Proxy Statement first mailed to limited partners on or about
December 14, 1999 as supplemented on or about January 13, 2000 and January
25, 2000. If the Partnership participates in the Whitehall transaction,
limited partners will receive an aggregate of $105 per unit of limited
partnership interests (including the estimated amount of the special
distribution). A special meeting of limited partners to consider and vote
on the proposal described more fully in the Proxy Statement is scheduled
for:
Wednesday, February 2, 2000
11:00 a.m., local time
Four Times Square
38th Floor
New York, New York 10036
McNeil Partners and the special committee of the Board of
Directors of the corporate General Partner each remains committed to the
Whitehall transaction and continues to believe that the Whitehall
transaction is fair to, and in the best interests of, the Partnership and
its limited partners. Accordingly, the Board of Directors of McNeil
Investors continues to recommend that limited partners of each of the
McNeil Partnerships approve the Whitehall transaction.
Limited partners with questions are encouraged to call the
Investor Services department of McNeil Partners, L.P. at 1-800-576-7907.
Source: McNeil Partners, L.P.
Contact: Barbara Smith of McNeil Partners, L.P., 972-448-5748
Exhibit (a)(7)
January 28, 2000 VIA FAX AND OVERNIGHT
Mr. Ralph C. Walker
Orrick, Herrington & Sutcliffe, LLP
Old Federal Building
400 Sansome Street
San Francisco, CA 94111-3143
RE: McNeil Real Estate Fund XX, L.P.
Dear Mr. Walker,
This letter is in response to your inquires set forth in an undated letter
which we received by facsimile transmission on January 27, 2000.
First of all, the question of financial resources is a total red herring.
The full amount of the tender offer price has been placed in escrow. This
is cash. Furthermore, it is obvious that 100% of all limited partners will
not tender as many wish to remain in the Partnership. The amount in escrow
satisfies your inquiry.
Finally, we have no "plans" with respect to Unit holders who wish to remain
in the partnership. Rather, our tender allows these limited partners a
choice to stay in. Contrast this with the large number of limited partner
Whitehall/McNeil are forcing out. We have many ideas which we think will
maximize partnership value, but we would seek limited partner approval
before implementation.
We trust this answers your inquiry. We have a question to you, "Is $110
more than $105?"
Very Truly Yours,
/s/ David L. Johnson
David L. Johnson
Member
