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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: November 14, 1996
(Date of earliest event reported)
ENSTAR INCOME PROGRAM IV-1, L.P.,
A GEORGIA LIMITED PARTNERSHIP
(Exact name of registrant as specified in its charter)
GEORGIA COMMISSION FILE: 58-1648322
(State or other jurisdiction 0-15705 (I.R.S. Employer
of incorporation or identification No.)
organization)
10900 WILSHIRE BOULEVARD, 15TH FLOOR
LOS ANGELES, CALIFORNIA 90024
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES, INCLUDING ZIP CODE)
(310) 824-9990
(Registrant's phone number, including area code)
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ITEM 5. OTHER EVENTS
On October 31, 1996 and November 5, 1996, Everest Cable Investors,
L.L.C. and JJJ Group, L.L.C., respectively and separately, disseminated a
letter stating their interest in acquiring up to 1,959 units of limited
partnership interests in Enstar Income/Growth Program IV-1, L.P. (the
"Registrant") for a price of $80 and $90 per unit, respectively, less certain
transaction costs. These offers were made without the consent or involvement
of the Registrant's Corporate General Partner. The Corporate General Partner
has considered each offer, concluded that each is inadequate and, accordingly,
recommended that limited partners not accept either 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 November 14, 1996 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 November 14, 1996.
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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/GROWTH PROGRAM IV-1, L.P.
a Georgia limited partnership
By: Enstar Communications Corporation
General Partner
Date: November 14, 1996. By: /s/ Michael K. Menerey
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Michael K. Menerey
Chief Financial Officer
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Sequentially
Numbered
Exhibit Description Page
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5.1 Letter to Limited 5
Partners dated
November 14, 1996
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(Enstar Letterhead)
November 14, 1996
Dear Limited Partner:
Enstar Income Program IV-1, Ltd. (the "Partnership") has become aware
that two separate unsolicited offers, each for up to 1,959 units (representing
approximately 4.9% of the outstanding Units in the Partnership), were commenced
by:
1. Everest Cable Investors, L.L.C. ("Everest") at a price of $80 per
Unit, in a letter dated October 31, 1996; and
2. JJJ Group, L.L.C. ("JJJ Group") at a price of $90 per Unit, in a
letter dated November 5, 1996.
THESE OFFERS WERE 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 offers.
We have considered these offers and, based on the very limited information made
available by Everest and JJJ Group, believe that each 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 both the Everest offer and the JJJ Group
offer. We urge you not to sign either the Agreement of Transfer for Limited
Partnership Interest Form (sent by Everest) or the Limited Power of Attorney
(sent by JJJ Group) and not to tender your Units to either Everest or JJJ
Group. In evaluating the offers, the Corporate General Partner believes that
its limited partners should consider the following information:
# The offering price for each limited partnership unit during the offering
period was $250 per unit. Cash distributions of approximately $112 per
unit were paid from formation through October 31, 1996. The Partnership
expects to continue to pay quarterly distributions to Unitholders during
the remainder of 1996 at the annualized rate of five percent. In contrast,
Everest's offer is only $80 per unit while JJJ Group's offer is only $90
per unit. If either Everest or JJJ Group is successful in buying Units at
the price in each of its offer, each will own units at much lower prices
than virtually all of the current partners and, in our view, for much less
than they are worth. Limited partners should note that the Partnership's
cash flow (operating income before depreciation and amortization) for the
twelve months ended September 30, 1996 was approximately $31 per unit. The
Everest and JJJ Group offer each represent a valuation of only
approximately 2.5 times and 2.9 times said cash flow, respectively (after
adjustment for the excess of current assets over total liabilities as of
September 30, 1996).
# As of the date of this letter, the Corporate General Partner believes that
a reasonable range of valuation per limited partnership unit is between
$173 and $235 based on the factors noted below. The Corporate General
Partner believes that each of the above offers is inadequate because the
price in each offer does not even approach the $173 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
September 30, 1996, 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
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Partner's belief as 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.
# Based on the information received by the Corporate General Partner, the $80
per unit offer by Everest and the $90 per unit offer by JJJ Group are each
less than the price for which limited partnership units were recently sold
on the secondary market. Partnership Spectrum, an independent industry
publication, has reported that between August 1, 1996 and September 30,
1996, 56 Units were sold on the secondary market at $120 per unit. In the
Corporate General Partner's opinion, the fact that the Everest and JJJ
Group offers are being made at a discount from the most recent secondary
market price available to the Corporate General Partner only serves to
underscore the inadequacy of each offer. In addition, the Corporate General
Partner believes that the price for units in the secondary market is not an
accurate reflection of the fair market value of such units due to the low
volume of transactions in that limited market and the legal and tax
restrictions on such transfers.
For the reasons discussed above, the Corporate General Partner
believes that the Everest offer and the JJJ Group offer are 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 either the Everest offer or the
JJJ Group 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 IV-1, Ltd.
A Georgia Limited Partnership
cc: Account Representative
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