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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: March 11, 1997
(Date of earliest event reported)
ENSTAR INCOME PROGRAM IV-3, L.P.,
A GEORGIA LIMITED PARTNERSHIP
(Exact name of registrant as specified in its charter)
GEORGIA COMMISSION FILE: 58-1648320
(State or other jurisdiction 0-15686 (I.R.S. Employer
of incorporation or organization) identification No.)
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 February 17, 1997, Gale Island, LLC disseminated a
letter stating their interest in acquiring up to 1,915 units of
limited partnership interests in Enstar Income Program IV-3, L.P.
(the "Registrant") for a price of $110, 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 this 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 March 11,
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
(c) Exhibits
5.1 Letter to Limited Partners dated March 11, 1997.
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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 PROGRAM IV-3, L.P.
a Georgia limited partnership
By: Enstar Communications Corporation
General Partner
Date: March 11, 1997. By: /s/ Michael K. Menerey
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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
March 11, 1997
</TABLE>
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(Enstar Letterhead)
March 11, 1997
Dear Limited Partner:
Enstar Income Program IV-3, Ltd. (the "Partnership") has recently
become aware that an unsolicited offer for up to 1,915 units (representing
approximately 4.8% of the outstanding Units in the Partnership), at a price of
$110 per Unit, was commenced by Gale Island, LLC ("Gale") in a letter dated
February 17, 1997. This offer was made without the consent or the involvement of
the General Partner. We have considered this offer, and believe that it is
inadequate and not in your best interest to accept.
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 Gale offer. We
have considered this offer and, based on the very limited information made
available by Gale, 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 Gale offer. We urge you not to sign the Agreement of Transfer and
Sale Form that Gale sent to you and not tender your Units to Gale. In evaluating
the offer, 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 $110 per unit
were paid from formation through January 31, 1997. The Partnership expects
to continue to pay quarterly distributions to Unitholders during 1997 at
the annualized rate of five percent. In contrast, the Gale offer is only
$110 per unit. If Gale is successful in buying Units at the price in its
offer, Gale 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 $29 per unit. The Gale offer
represents a valuation of only approximately 3.6 times said cash flow
(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
$162 and $219 based on the factors noted below. The Corporate General
Partner believes that Gale offer is inadequate because the price in its
offer does not even approach the $162 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 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.
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- - Based on the information received by the Corporate General Partner, the
$110 per unit offer by Gale is 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
December 1, 1996 and January 31, 1997, 196 Units were sold on the secondary
market between a high of $150 per unit and a low of $127 per unit. In the
Corporate General Partner's opinion, the fact that the Gale offer is 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
the Gale 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. Should unitholders wish to sell their Units, there are a
number of independent firms that trade interests of limited partnership on
the secondary market, including:
<TABLE>
<S> <C>
Napex 800-356-2739 American Partnership Services 800-736-9797
Cuyler & Associates 800-274-9991 Nationwide Partnership Marketplace 800-969-8996
DCC Securities 800-945-0440 Chicago Partnership Board 800-272-6273
</TABLE>
For the reasons discussed above, the Corporate General Partner believes
that the Gale 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 Gale 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-3, Ltd.
A Georgia Limited Partnership
cc: Account Representative
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