<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: December 17, 1997
(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 0-15705 58-1648322
(STATE OR OTHER JURISDICTION (COMMISSION (IRS EMPLOYER
OF INCORPORATION OR ORGANIZATION) FILE NUMBER) IDENTIFICATION NO.)
10900 Wilshire Blvd., 15th Floor, Los Angeles, California 90024
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
Registrant's telephone number, including area code: (310) 824-9990
<PAGE> 2
ITEM 5. OTHER EVENTS.
On November 25, 1997, Smithtown Bay, LLC disseminated a letter stating
its interest in acquiring up to 1,680 units of limited partnership interests in
Enstar Income Program IV-1, L.P. (the "Registrant") for a price of $120
per unit less certain transaction costs. This offer was made without the consent
or involvement of the Registrant's Corporate General Partner. The Corporate
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 December 17, 1997 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
<TABLE>
<S> <C>
(c) Exhibits
5.1 Letter to Limited Partners dated December 17, 1997.
</TABLE>
****
-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 IV-1, L.P.,
A Georgia limited partnership
By: Enstar Communications Corporation
General Partner
Date: December 18, 1997 By: /s/ Michael K. Menerey
-----------------------------
Michael K. Menerey
Chief Financial Officer
-3-
<PAGE> 4
<TABLE>
<CAPTION>
Sequentially
Numbered
Exhibit Description Page
------- ----------------- ------------
<S> <C> <C>
5.1 Letter to Limited 5
Partners dated
December 17, 1997
</TABLE>
-4-
<PAGE> 1
EXHIBIT 5.1
December 17, 1997
Dear Limited Partner:
Enstar Income Program IV-1, Ltd. (the "Partnership") has become aware
that an unsolicited offer for up to 1,680 units (representing less than 4.9% of
the outstanding Units in the Partnership), at a price of $120 per Unit, was
commenced by Smithtown Bay, LLC ("Smithtown"), in a letter dated November 25,
1997. THIS OFFER WAS MADE WITHOUT THE CONSENT OR THE INVOLVEMENT OF THE
CORPORATE GENERAL PARTNER.
One of the obligations of the Corporate General Partner is to endeavor
to preserve the status of the Partnership as a partnership under Federal income
tax laws. Failure to maintain this status could have a material adverse effect
on the Partnership and its partners. Among the related legal requirements
imposed upon the Partnership is that its partnership interests not be traded in
an established securities market. As it believes is customary, the Partnership
complies with this requirement by adhering to a safe harbor provision contained
in the Federal income tax regulations which limits most sales of limited
partnership interests to five percent of the outstanding units in any given
year. That limitation was reached during May 1997. Accordingly, no further
resales of units, including any attempted sales related to the Smithtown offer,
will be recognized by the Partnership for the balance of 1997.
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 Smithtown offer.
We have considered this offer and, based on the very limited information made
available by Smithtown, 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 offer. We urge you not to sign the Agreement of Transfer and Sale
that Smithtown sent to you and not to tender your Units to Smithtown. 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 $124.65 per
unit were paid from formation through September 30, 1997. The Partnership
expects to continue to pay quarterly distributions to Unitholders during the
remainder of 1997 at the annualized rate of five percent. Smithtown's offer
is only $120 per unit. If Smithtown is successful in buying Units at the
price in its offer, it will own units, 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, 1997 was approximately $38.32 per unit. The
Smithtown offer represents a valuation of only approximately 2.78 times said
cash flow (after adjustment for the excess of current assets over total
liabilities as of September 30, 1997).
<PAGE> 2
o As discussed above, as of May 1, 1997, the Partnership informed its
Transfer Agent that, in order to protect its tax status as a partnership for
Federal income tax purposes, it will not recognize any additional resales of
limited partnership assignee units for the remainder of 1997 in order to
remain in compliance with applicable Federal income tax regulations.
Transfers to which the above trading limit DOES NOT apply include (i)
carryover basis transactions, (ii) transfers at death, (iii) transfers
between siblings, spouses, ancestors or lineal descendants and (iv)
distributions from a qualified retirement plan.
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 $200
and $250 based on the factors noted below. The Corporate General Partner
believes that the Smithtown offer is inadequate because it does not even
approach the $200 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, 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 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 Smithtown 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 Smithtown 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
