SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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SCHEDULE 14D-9
Solicitation/Recommendation Statement Pursuant to Section 14(d)(4)
of the Securities Exchange Act of 1934
(AMENDMENT No. 2)
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AETNA REAL ESTATE ASSOCIATES, L.P.
(Name of Subject Company)
AETNA REAL ESTATE ASSOCIATES, L.P.
(Name of Person Filing Statement)
Limited Partnership Depository Units
(Title of Class of Securities)
008171 1 10 0
(CUSIP Number of Class of Securities)
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Paul L. Abbott Daniel R. Leary
AREA GP CORPORATION AETNA/AREA CORPORATION
3 World Financial Center, 29th Floor 242 Trumbull Street
New York, New York 10285 Hartford, Connecticut 06156
(212) 526-3237 (860) 275-2178
(Name, Address, and Telephone Number of Persons Authorized to
Receive Notices and Communications on Behalf of the
Person(s) filing Statement)
Copies to:
Patrick J. Foye, Esq. John D. Capers, Esq.
SKADDEN, ARPS, SLATE, KING & SPALDING
MEAGHER & FLOM LLP 191 Peachtree Street, N.E.
919 Third Avenue Atlanta, Georgia 30303-1763.
New York, New York 10022 (404) 572-4600
(212) 735-2274
AMENDMENT NO. 2 TO SCHEDULE 14D-9
This Amendment No. 2 amends the Tender Offer Solicita-
tion/Recommendation Statement on Schedule 14D-9, filed with the Commission
on November 1, 1996 (the "Schedule 14D-9"), as amended by Amendment No. 1
filed on November 27, 1996, by Aetna Real Estate Associates, L.P., a
Delaware limited partnership (the "Partnership"), relating to the
unsolicited tender offer by Acorn Hill Partners L.L.C., a Delaware limited
liability company (the "Bidder"), to purchase from holders ("Unitholders")
of Limited Partnership Depositary Units of the Partnership (the "Units") up
to 3,176,136 of the issued and outstanding Units of the Partnership, upon
the terms and subject to the conditions set forth in the Bidder's Offer to
Purchase dated October 30, 1996 and the Letter of Transmittal.
Unless otherwise indicated herein, each capitalized term used
but not defined herein shall have the meaning assigned to such term in the
Schedule 14D-9.
Item 9. Material to be Filed as Exhibits
Item 9 is hereby supplemented and amended by adding the
following, a copy of which is attached hereto as an exhibit:
(a)(2) Form of letter from Aetna Real Estate Associates, L.P. to the
Unitholders, dated December 6, 1996.
SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is true,
complete and correct.
Dated: December 6, 1996
AETNA REAL ESTATE ASSOCIATES, L.P.
By: Aetna/AREA Corporation
General Partner
By: /s/ Daniel R. Leary
Name: Daniel R. Leary
Title: President
By: AREA GP Corporation
General Partner
By: /s/ Paul S. Abbott
Name: Paul L. Abbott
Title: President
EXHIBIT INDEX
Exhibit Description Page
(a)(2) Form of letter from Aetna Real Estate
Associates, L.P. to Unitholders,
dated December 6, 1996.
AETNA REAL ESTATE ASSOCIATES, L.P.
December 6, 1996
Dear Unitholder:
On December 2, 1996, Acorn Hill Partners L.L.C. ("Acorn") revised its
unsolicited partial tender offer being made for your Limited Partnership
Depository Units ("Units") of Aetna Real Estate Associates, L.P. (the
"Partnership"), increasing its offer from $10 to $10.75 per Unit (the
"Revised Acorn Offer"). Neither Acorn nor any of its affiliates are
affiliated with the Partnership or its general partners and the Revised
Acorn Offer was not solicited by the Partnership.
THE PARTNERSHIP, IN LIGHT OF ALL RELEVANT CIRCUMSTANCES, HAS DETERMINED
THAT THE REVISED ACORN OFFER IS INADEQUATE, NOT IN THE BEST INTERESTS OF
EITHER THE PARTNERSHIP OR UNITHOLDERS AND THE PARTNERSHIP STRONGLY
RECOMMENDS THAT UNITHOLDERS REJECT IT. The Partnership reached this
conclusion after considering a variety of factors, including, but not
limited to, the following:
o Neither the original Acorn offer nor the Revised Acorn Offer
reflect the value inherent in the Units. The price being
offered by Acorn pursuant to the Revised Acorn Offer has only
increased from 64% to 69% of the Partnership's net asset value
("NAV") of $15.60 per Unit as of September 30, 1996. The
Partnership's NAV was calculated assuming a hypothetical sale
at September 30, 1996 of all the Partnership's properties at a
price based upon independent appraisals of the Partnership's
properties as of September 30, 1996 adjusted for the
Partnership's current assets and liabilities.
o The book value of each Unit, as of September 30, 1996, was
$15.98, over 56% greater than the original Acorn offer and over
48% greater than the Revised Acorn Offer.
o If you accept the Revised Acorn Offer you will no longer
receive cash distributions. To date, Unitholders who did not
elect to participate in the Dividend Reinvestment Program
have received total cash distributions ranging from
$5.72 to $10.13 per original Unit, depending on the date you
were admitted to the Partnership, including $1.85 per Unit in
return of capital payments. The Partnership is currently paying
a quarterly cash distribution of $0.18, or $0.72 annually, per
Unit. Unitholders who sell their Units to Acorn will lose their
right to receive future quarterly distributions from
operations. Furthermore, Unitholders who sell their Units to
Acorn will lose the right to future distributions from future
sales of Partnership properties.
o Acorn is making the Revised Acorn Offer with a view to making a
profit. Accordingly, there is a conflict of interest between
its desire to purchase the Units at a low price and
Unitholders' desire to sell their Units at a high price.
The Partnership strongly recommends that you reject the Revised Acorn
Offer.
Furthermore, Acorn has extended its offer and it is now scheduled to
expire on December 20, 1996. UNITHOLDERS WHO HAVE PREVIOUSLY TENDERED
THEIR UNITS TO ACORN MAY WITHDRAW THOSE UNITS on or before December 20,
1996, by following the procedures outlined in the materials previously
provided to you by Acorn. WE STRONGLY URGE THAT UNITHOLDERS WHO HAVE
TENDERED TO ACORN WITHDRAW THEIR UNITS.
You also may have received materials describing an unsolicited partial
tender offer being made by First Trust Co., L.P. (the "First Trust
Offer") for your Units at $10.60 per Unit, which is less than the
Revised Acorn Offer. ACCORDINGLY, THE PARTNERSHIP STRONGLY RECOMMENDS
THAT UNITHOLDERS REJECT THE FIRST TRUST OFFER.
We will, of course, continue to keep you informed of significant events
concerning the Partnership. Should you have any questions concerning
this letter, please contact MacKenzie Partners, Inc. which is assisting
the Partnership in responding to your inquiries, toll free at (800)
322-2885.
Very truly yours,
Paul L. Abbott Daniel R. Leary
President President
AREA GP Corporation Aetna/AREA Corporation
General Partner General Partner
