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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 18, 1996
(Date of earliest event reported)
ENSTAR INCOME PROGRAM IV-2, L.P.,
A GEORGIA LIMITED PARTNERSHIP
(Exact name of registrant as specified in its charter)
GEORGIA COMMISSION FILE: 58-1648318
(State or other jurisdiction 0-15706 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 November 5, 1996 and November 6, 1996, Everest Cable
Investors, L.L.C. and JJJ Group, L.L.C., respectively and
separately, each disseminated a letter stating their interest in
acquiring up to 1,952 units of limited partnership interests in
Enstar Income Program IV-2, L.P. (the "Registrant") for a price
of $82 and $125 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 18,
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 18,
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-2, L.P.
a Georgia limited partnership
By: Enstar Communications Corporation
General Partner
Date: November 18, 1996. By: /s/ Michael K. Menerey
-----------------------------------
Michael K. Menerey
Chief Financial Officer
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<TABLE>
<CAPTION>
Sequentially
Numbered
Exhibit Description Page
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<S> <C> <C>
5.1 Letter to Limited 5
Partners dated
November 18, 1996
</TABLE>
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(Enstar Letterhead)
November 18, 1996
Dear Limited Partner:
Enstar Income Program IV-2, Ltd. (the "Partnership") has become aware
that two separate unsolicited offers, each for up to 1,952 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 $82 per
Unit, in a letter dated November 5, 1996; and
2. JJJ Group, L.L.C. ("JJJ Group") at a price of $125 per Unit, in a
letter dated November 6, 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:
o The offering price for each limited partnership unit during the offering
period was $250 per unit. Cash distributions of approximately $106 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 $82 per unit while JJJ Group's offer is $125 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 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 $32 per unit. The Everest
and JJJ Group offer each represent a valuation of only approximately 2.3
times and 3.7 times said cash flow, respectively (after adjustment for the
excess of current assets over total liabilities as of September 30, 1996).
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
$180 and $242 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 $180 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
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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.
o Furthermore, you should also be aware that there is a limited secondary
market for sale of partnership units. Partnership Spectrum, an independent
industry publication, has reported that between August 1, 1996 and
September 30, 1996, 149 Units were sold on the secondary market between a
high of $125 per unit and a low of $113 per unit. The 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-2, Ltd.
A Georgia Limited Partnership
cc: Account Representative
