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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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SCHEDULE 14D-1/A
Tender Offer Statement Pursuant to Section
14(d)(1) of the Securities Exchange Act of 1934
(AMENDMENT NO. 1)
DIVALL INSURED INCOME FUND LIMITED PARTNERSHIP
(Name of Subject Company)
U.S. RESTAURANT PROPERTIES, INC.
(Bidder)
Limited Partnership Interests
(Title of Class of Securities)
255016107
(CUSIP Number of Class of Securities)
ROBERT J. STETSON
U.S. RESTAURANT PROPERTIES, INC.
5310 HARVEST HILL ROAD
SUITE 270
DALLAS, TEXAS 75230
(972) 387-1487
(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications on Behalf of Bidder)
COPIES TO:
KENNETH L. BETTS
WINSTEAD SECHREST & MINICK P.C.
1201 ELM STREET
SUITE 5400
DALLAS, TEXAS 75270
(214) 745-5400
CALCULATION OF FILING FEE
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Transaction valuation Amount of filing fee
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$7,187,500 $1,438*
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|_| Check box if any part of the fee is offset as provided by Rule
0-11(a)(2) and identify the filing with which the offsetting fee was
previously paid. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
Amount Previously Paid: Not applicable. Filing Party: Not applicable.
Form or Registration No.: Not applicable. Date Filed: Not applicable.
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*Previously paid
<PAGE>
This Amendment No. 1 to the Tender Offer Statement on Schedule 14D-1
(the "Schedule 14D-1"), initially filed on March 27, 1998, relates to the offer
by U.S. Restaurant Properties, Inc., a Maryland corporation (the "Bidder"), to
purchase up to 49.9% of the limited partnership interests (the "Interests"), of
Divall Insured Income Fund Limited Partnership, a Wisconsin limited partnership
(the "Partnership"), at a purchase price of $575 per Interest, net to the seller
in cash, upon the terms and subject to the conditions set forth in the Bidder's
Offer to Purchase dated March 27, 1998 (the "Offer to Purchase") and in the
related Letter of Transmittal (which, as amended from time to time, together
with the Offer to Purchase, constitutes the "Offer"), copies of which were
attached to the Schedule 14D-1 as Exhibits (a)(1) and (a)(2) respectively.
ITEM 10. ADDITIONAL INFORMATION
On March 30, 1998, the Partnership, through its general partner The
Provo Group, Inc., an Illinois corporation (the "General Partner"), filed a
Solicitation/Recommendation Statement on Schedule 14D-9 relating to the Offer
with the Securities and Exchange Commission, in which the General Partner
recommended to the Partnership's limited partners (the "Limited Partners") that
they reject the Offer and not tender their Interests pursuant to the Offer.
Attached as an Exhibit to the Schedule 14D-9 was a letter to the Limited
Partners dated March 31, 1998.
A letter to the Limited Partners from the Bidder with respect to the
foregoing is filed as Exhibit (a)(5) to the Schedule 14D-1 and is incorporated
herein by reference.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS
Item 11 is hereby amended and supplemented by adding the following
Exhibit:
(a)(5) Form of Response Letter, dated April 21, 1998, sent to Interest
Holders.
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SIGNATURE
After due 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: April 21, 1998
U.S. RESTAURANT PROPERTIES, INC.
By: /s/ Robert J. Stetson
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Robert J. Stetson
Chief Executive Officer and
President
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<PAGE>
EXHIBIT (a)(5)
FORM OF RESPONSE LETTER
April 21, 1998
Re: DiVall Insured Income Fund L.P. (the "Partnership")
Offer of U.S. Restaurant Properties, Inc.
Dear Limited Partner:
By now, you should have received an Offer to Purchase dated March 27, 1998 from
U.S. Restaurant Properties, Inc. (NYSE:USV) in which we are offering to purchase
units of the Partnership at a price of $575 each. In addition, you may have also
received a letter dated March 31, 1998 from your General Partner, urging you to
reject USV's Tender Offer. While we certainly do not want to get into a "mud
slinging" contest, we believe your General Partner's letter contains certain
inaccuracies which should be addressed.
Consider the following:
IS YOUR GENERAL PARTNER TELLING YOU THE WHOLE STORY?
In his letter to the Limited Partners, Mr. Provo describes USV as attempting to
"cheaply and cleverly" acquire your Partnership's properties by making a Tender
Offer for your Partnership's units. According to Mr. Provo, the proper course of
action would have USV submitting a bid to buy the properties from the
Partnership. Unfortunately, Mr. Provo fails to mention that in January of this
year, USV DID present a bid to Mr. Provo to buy your Partnership's properties at
an aggregate price of $14,975,000.
In response to USV's January 1998 purchase offer for the properties, your
General Partner informed USV the PARTNERSHIP WAS NOT FOR SALE. Now, two months
later, your General Partner says the PARTNERSHIP IS FOR SALE, and competitive
bids for the properties should be entertained. If your General Partner felt
USV's January offer of the properties was low, why didn't he begin negotiations?
Furthermore, why didn't your General Partner inform the Limited Partners that an
offer for the properties had even been made?
DID YOUR PARTNERSHIP UNITS REALLY INCREASE IN VALUE BY 20% IN ONE YEAR?
Your General Partner has stated your Partnership units are presently worth
approximately $660 each. One year ago, your General Partner stated in the
Partnership's 1996 Annual Report your Partnership units were worth approximately
$550 each. It is difficult for us to understand how your Partnership units could
have increased in value over the past year by 20%, especially when the Net
Operating Income of the Partnership increased by only 7%. We can only surmise
that either last year's value was too low, or this year's value is inflated.
Whatever the case, the wide variance between the two values leaves us puzzled
over the methodology.
<PAGE>
IS USV TRYING TO "LOWBALL" YOU?
USV's Tender Offer price was derived utilizing a methodology which assumed the
sale of all the other properties at today's real estate values, followed by the
liquidation of the Partnership. We estimated a value for the properties based
upon their actual cash flow as reported in the Partnership's financial
statements. This method for valuing properties is widely used and accepted
through the entire real estate industry. Over the past two years, USV has
acquired over $300 million worth of restaurant properties utilizing the same
property valuation techniques employed for the DiVall Tender Offer. These
properties were purchased in a competitive real estate environment in numerous
transactions negotiated with a variety of sellers. If USV was in the habit of
making "lowball" offers for real estate properties, we could not have been
nearly as successful in acquiring new properties over the last 24 months. It is
clear from our recent history that USV IS VERY WILLING TO OFFER FAIR PRICES FOR
GOOD ASSETS.
WHY IS USV TENDERING FOR MY PARTNERSHIP UNITS?
USV is making a Tender Offer for Partnership units as a direct result of The
Provo Group's unwillingness to present our purchase offer for the properties to
the Limited Partners. We believe that Limited Partners should be allowed to make
their own decisions with respect to their investments.
MAKE AN INFORMED DECISION ABOUT YOUR INVESTMENT!
We are familiar with the history of your Partnership. Given all the difficulties
you have endured as investors in this Partnership, you have every reason to be
wary of any offers made relative to your investments. In spite of any misgivings
you might have, we urge you to simply review the terms of USV's Tender Offer. We
strongly disagree with your General Partner's assessment that USV's Tender Offer
price for units is inadequate. As the old adage states, "There are two sides to
every story". Call your General Partner AND call us to hear what both sides have
to say about USV's Tender Offer. We are not the corporate "monsters" that your
General Partner would lead you to believe. We have owned, managed and leased
restaurant properties since 1986, and believe we know what restaurant properties
are worth.
Call us. Bob Coleman will be happy to take your call at (800) 449-8435. You will
not receive high pressure tactics, only answers to your questions.
Sincerely,
Robert J. Stetson, President
U.S. Restaurant Properties, Inc.
