<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): April 16, 1998
Enstar Income Program II-1, L.P.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
Georgia 0-14508 58-1628877
(STATE OR OTHER JURISDICTION (COMMISSION (IRS EMPLOYER
OF INCORPORATION) FILE NUMBER) IDENTIFICATION NO.)
</TABLE>
<TABLE>
<C> <C>
10900 Wilshire Blvd., 15th Floor, Los Angeles, California 90024
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
</TABLE>
Registrant's telephone number, including area code: (310) 824-9990
<PAGE> 2
ITEM 5. OTHER EVENTS.
In early April, Sierra Fund 3 disseminated a letter stating its interest
in acquiring up to approximately 1,048 units of limited partnership interests in
Enstar Income Program II-1, L.P. (the "Registrant") for a price of $185 per
unit. This offer was made without the consent or involvement of the Registrant's
Corporate General Partner. The Coprorate General Partner has considered the
offer, concluded that it is inadequate and, accordingly, recommended that
limited partners not accept the offer. Pursuant to Rule 14e-2 promulgated under
the Securities Exchange Act of 1934, as amended, this recommendation and the
Corporate General Partner's bases therefor were conveyed to limited partners in
a letter dated April 16, 1998 which is filed as an exhibit hereto and
incorporated herein by this reference.
FORWARD-LOOKING STATEMENTS CONTAINED OR REFERRED TO IN THIS REPORT ARE
MADE PURSUANT TO THE SAFE HARBOR PROVISIONS OF SECTION 21E OF THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED. INVESTORS ARE CAUTIONED THAT SUCH
FORWARD-LOOKING STATEMENTS INVOLVE RISKS AND UNCERTAINTIES INCLUDING, WITHOUT
LIMITATION, THE EFFECTS OF LEGISLATIVE AND REGULATORY CHANGES; THE POTENTIAL OF
INCREASED LEVELS OF COMPETITION FOR THE PARTNERSHIP; TECHNOLOGICAL CHANGES; THE
PARTNERSHIP'S DEPENDENCE UPON THIRD-PARTY PROGRAMMING; THE ABSENCE OF UNITHOLDER
PARTICIPATION IN THE GOVERNANCE AND MANAGEMENT OF THE PARTNERSHIP; THE
MANAGEMENT FEES PAYABLE TO THE CORPORATE GENERAL PARTNER; THE EXONERATION AND
INDEMNIFICATION PROVISIONS CONTAINED IN THE PARTNERSHIP AGREEMENT RELATING TO
THE CORPORATE GENERAL PARTNER; OTHER POTENTIAL CONFLICTS OF INTEREST INVOLVING
THE CORPORATE GENERAL PARTNER AND ITS AFFILIATES; AND OTHER RISKS DETAILED FROM
TIME TO TIME IN THE PARTNERSHIP'S ANNUAL REPORT ON FORM 10-K AND OTHER PERIODIC
REPORTS FILED WITH THE COMMISSION.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(c) Exhibits
5.1 Letter to Limited Partners dated April 16, 1998.
* * * *
-2-
<PAGE> 3
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ENSTAR INCOME PROGRAM II-1, L.P.
a Georgia limited partnership
By: Enstar Communications Corporation
General Partner
By: /s/ Michael K. Menerey
------------------------------------
Michael K. Menerey
Executive Vice President, Chief
Financial Officer and Secretary
Date: April 30, 1998
-3-
<PAGE> 1
EXHIBIT 5.1
April 16, 1998
Dear Limited Partner:
Enstar Income Program II-1, L.P. (the "Partnership") has become aware
that an unsolicited offer for up to approximately 1,048 of the outstanding Units
in the Partnership, at a price of $185 per Unit, was commenced by Sierra Fund 3
("Sierra").
THIS OFFER WAS MADE WITHOUT THE CONSENT OR THE INVOLVEMENT OF THE
CORPORATE GENERAL PARTNER.
Pursuant to rule 14e-2 under the Securities Exchange Act of 1934, we are
required to furnish you with our position with respect to the above offer. We
have considered this offer and, based on the very limited information made
available by Sierra, believe that it is inadequate, not representative of the
inherent value of the Partnership's cable systems and not in your best interest
to accept. Accordingly, the Corporate General Partner's recommendation is that
you reject the Sierra offer. We urge you not to sign either the Agreement of
Transfer and Assignment and not to tender your Units to Sierra. In evaluating
the offer, the Corporate General Partner believes that its limited partners
should consider the following information:
o The offering price for each limited partnership Unit during the offering
period was $250 per Unit. Cash distributions of approximately $159 per Unit
were paid from formation through December 31, 1997. The Partnership expects
to continue to pay quarterly distributions to Unitholders during 1998 at the
annualized rate of five percent. In contrast, Sierra's offer is $185 per
Unit. Limited partners should note that the Partnership's cash flow
(operating income before depreciation and amortization) for the twelve
months ended December 31, 1997 was approximately $47 per Unit. The Sierra
offer represents a valuation of only approximately 2.85 times said cash flow
(after adjustment for the excess of current assets over total liabilities as
of December 31, 1997).
o As of the date of this letter, the Corporate General Partner believes that
a reasonable range of valuation per limited partnership Unit is between $350
and $430 based on the factors noted below. The Corporate General Partner
believes that the Sierra offer is inadequate because the price in the offer
does not even approach the $350 low end of the range provided. The Corporate
General Partner did not retain a third party to conduct an evaluation of the
Partnership's assets or otherwise obtain any appraisals. Rather, the per
Unit valuations provided were derived by attributing a range of multiples to
the Partnership's cash flow (operating income before depreciation and
amortization) for the twelve months ended December 31, 1997, adjusted for
the excess of current assets over total liabilities. The Corporate General
Partner has selected market multiples based on, among other things, its
understanding of the multiples placed on other transactions involving
comparable cable television properties and the securities of companies in
that industry. The Corporate General Partner's belief as
<PAGE> 2
to the valuation range provided is necessarily based on economic, industry
and financial market conditions as they exist as of the date of this letter,
all of which are subject to change, and there can be no assurance that the
Partnership's cable properties could actually be sold at a price within this
range. Additionally, the valuations provided do not give effect to any
brokerage or other transaction fees that might be incurred by the
Partnership in any actual sale of the Partnership's system.
For the reasons discussed above, the Corporate General Partner believes
that the Sierra offer is not in the best interest of the limited partners and
recommends that you NOT transfer, agree to transfer, or tender any Units in
response to the Sierra offer.
If you have any questions regarding these matters or your investment,
please call our Investor Services Department at (800) 433-4287.
Sincerely,
Enstar Income Program II-1, L.P.
A Georgia Limited Partnership
cc: Account Representative
