SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14D-9
(Amendment No. 1)
Solicitation/Recommendation Statement Pursuant to Section 14(d)(4) of the
Securities Exchange Act of
1934
BALCOR/COLONIAL STORAGE INCOME FUND-86
(Name of Subject Company)
BALCOR/COLONIAL STORAGE INCOME FUND-86
(Name of Person(s) Filing Statement)
Limited Partnership Interests
(Title of Class of Securities)
N/A
(CUSIP Number of Class of Securities)
Thomas E. Meador James R. Pruett
Chairman President
The Balcor Company Colonial Storage 86, Inc.
Bannockburn Lake Office Plaza 4381 Green Oaks Blvd. West,
2355 Waukegan Road, Suite A200 Suite 100
Bannockburn, Illinois 60015 Arlington, Texas 76016
(708) 267-1600 (817) 561-0100
(Name, Address and (Name, Address and
Telephone Number of Telephone Number of
Person Authorized to Person Authorized to
Receive Notice and Receive Notice and
Communications on Behalf Communications on Behalf
of the Person(s) Filing of the Person(s) Filing
Statement) Statement)
Copy To:
Michael P. Morrison, Esq.
Hopkins & Sutter
Three First National Plaza, Suite 4100
Chicago, Illinois 60602
(312) 558-6600
<PAGE>
Amendment No. 1 to Schedule 14D-9
This Amendment No. 1 to Schedule 14D-9 amends the Schedule 14D-9 (the
"Schedule 14D-9") filed by Balcor/Colonial Storage Income Fund-86, an Illinois
limited partnership (the "Partnership"), with the Securities and Exchange
Commission on February 7, 1996. All capitalized terms used herein but not
otherwise defined shall have the meanings ascribed to such terms in the
Schedule 14-9.
Item 4. The Solicitation and Recommendation
Item 4(b) is hereby amended to include the following additional
considerations:
"(vi) On February 12, 1996, the Partnership received a
non-binding proposal from Storage Trust Realty ("STR") to purchase all of
the Partnership's properties for a purchase price of $61 million. STR's
proposal is contingent upon, among other things, (i) the negotiation of a
mutually acceptable purchase agreement and related documentation and (ii)
STR's satisfactory due diligence review (i.e., environmental review, title
review, survey, physical inspection, etc.) of the Partnership's
properties, both of which may cause adjustments to STR's ultimate offer
price.
The General Partners are presently evaluating the STR proposal and
have not yet replied to STR. The General Partners are also soliciting
competing offers from other prospective institutional purchasers. The
General Partners will carefully consider any proposals which may be
received. The General Partners intend to provide an update on the status
of any negotiations to the limited partners prior to the termination of
the Public Storage tender offer.
The General Partners estimate that a sale of the properties for $61
million (together with the distributable cash in the Partnership) would
result in a liquidating distribution to Limited Partners of approximately
$235 per Unit, after deducting transaction costs, commissions and
dissolution expenses. Please note, however, that any sale of the
Partnership's assets to STR or any other party would be contingent upon a
number of factors including the negotiation of definitive documentation,
the completion of a satisfactory due diligence review and the approval of
the holders of a majority of the outstanding Units. Therefore, there can
be no assurances that any such sale will ultimately be completed.
As noted above, any sale of all or substantially all of the
Partnership's assets requires the approval of the holders of a majority of
the outstanding Units. If the General Partners receive an acceptable firm
offer, then the General Partners will attempt to obtain the necessary
Limited Partner approval through a proxy solicitation. If this approval
is obtained and the assets are subsequently sold, the Partnership will be
dissolved."
<PAGE>
Item 7. Certain Negotiations and Transactions by the Subject Company
Item 7 is hereby amended in its entirety to read as follows:
"(a) Except as described in (ii) below, there are no negotiations being
undertaken or underway by the Partnership in response to the Offer which relate
to or would result in: (1) an extraordinary transaction such as a merger or
reorganization involving the Partnership or any affiliate controlled by the
Partnership; (2) a purchase, sale or transfer of a material amount of assets by
the Partnership or any affiliate controlled by the Partnership; (3) a tender
offer for or other acquisition of securities by or of the Partnership; or (4)
any material change in the present capitalization or distribution policy of the
Partnership.
(i) On January 10, 1996, Everest Properties, Inc. ("Everest")
commenced an unsolicited tender offer to purchase up to 4.9% of the Units
at a purchase price of $160. The Everest tender offer expired on February
12, 1996. The Everest offer was on a first-come, first-serve basis, and
all acceptances thereof were irrevocable.
(ii) On February 12, 1996, the Partnership received a non-binding
proposal from Storage Trust Realty ("STR") to purchase all of the
Partnership's properties for a purchase price of $61 million. STR's
proposal is contingent upon, among other things, (i) the negotiation of a
mutually acceptable purchase agreement and related documentation and (ii)
STR's satisfactory due diligence review (i.e., environmental review, title
review, survey, physical inspection, etc.) of the Partnership's
properties, both of which may cause adjustments to STR's ultimate offer
price.
The General Partners are presently evaluating the STR proposal and
have not yet replied to STR. The General Partners are also soliciting
competing offers from other prospective institutional purchasers. The
General Partners will carefully consider any proposals which may be
received. The General Partners intend to provide an update on the status
of any negotiations to the limited partners prior to the termination of
the Public Storage tender offer.
The General Partners estimate that a sale of the properties for $61
million (together with the distributable cash in the Partnership) would
result in a liquidating distribution to Limited Partners of approximately
$235 per Unit, after deducting transaction costs, commissions and
dissolution expenses. Please note, however, that any sale of the
Partnership's assets to STR or any other party would be contingent upon a
number of factors including the negotiation of definitive documentation,
the completion of a satisfactory due diligence review and the approval of
the holders of a majority of the outstanding Units. Therefore, there can
be no assurances that any such sale will ultimately be completed.
As noted above, any sale of all or substantially all of the
Partnership's assets requires the approval of the holders of a majority of
the outstanding Units. If the General Partners receive an acceptable firm
offer, then the General Partners will attempt to obtain the necessary
Limited Partner approval through a proxy solicitation. If this approval
is obtained and the assets are subsequently sold, the Partnership will be
dissolved.
<PAGE>
(b) Except for the non-binding proposal from STR described in Item
7(a)(ii) above (which has not been executed by the Partnership, the General
Partners, or any person acting on behalf of any of them), there are no
transactions, General Partner resolutions, agreements in principle or signed
contracts in response to the Offer that relate to or would result in one or
more of the events referred to in Item 7(a)."
Item 9. Material to be Filed as Exhibits
Item 9 is hereby amended to include the following exhibit (a)(3):
"(a)(3) Letter to Investors, dated February 23, 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: February 23, 1996 BALCOR/COLONIAL STORAGE INCOME FUND-86
By: Balcor Storage Partners-86, a general
partner
By: The Balcor Company, a partner
By: /s/Thomas E. Meador
-----------------------------
Thomas E. Meador, Chairman
By: Colonial Storage 86, Inc., a general
partner
By: /s/James R. Pruett
-----------------------------
James R. Pruett, President
<PAGE>
BALCOR/COLONIAL STORAGE INCOME FUND - 86
P.O. Box 7190
Deerfield, Illinois 60015-7190
February 23, 1996
Dear Investor:
As you know, on January 25, 1996 Public Storage, Inc. ("PSI") announced an
unsolicited offer to purchase up to 64,226 (25%) of the outstanding limited
partnership interests ("Units") in Balcor/Colonial Storage Income Fund - 86
(the "Partnership") for a price of $200 per Unit. In our letter to you dated
February 7, 1996, we informed you that we were expressing no opinion and
remaining neutral with respect to PSI's offer. While our position with respect
to PSI's offer has not changed, we have received additional information which
you may wish to consider in evaluating the offer.
On February 12, 1996, the Partnership received a non-binding proposal from
Storage Trust Realty ("STR") to purchase all of the Partnership's properties
for a purchase price of $61 million. STR's proposal is contingent upon, among
other things, (i) the negotiation of a mutually acceptable purchase agreement
and related documentation and (ii) STR's satisfactory due diligence review
(i.e., environmental review, title review, survey, physical inspection, etc.)
of the Partnership's properties, both of which may cause adjustments to STR's
ultimate offer price.
The General Partners are presently evaluating the STR proposal and have
not yet replied to STR. The General Partners are also soliciting competing
offers from other prospective institutional purchasers. The General Partners
will carefully consider any proposals which may be received. The General
Partners intend to provide an update on the status of any negotiations to the
limited partners prior to the termination of the PSI tender offer.
The General Partners estimate that a sale of the properties for $61
million (together with the distributable cash in the Partnership) would result
in a liquidating distribution to limited partners of approximately $235 per
Unit, after deducting transaction costs, commissions and dissolution expenses.
Please note, however, that any sale of the Partnership's assets to STR or any
other party would be contingent upon a number of factors including the
negotiation of definitive documentation, the completion of a satisfactory due
diligence review and the approval of the holders of a majority of the
outstanding Units. Therefore, there can be no assurances that any such sale
will ultimately be completed.
As noted above, any sale of all or substantially all of the Partnership's
assets requires the approval of the holders of a majority of the outstanding
Units. If the General Partners receive an acceptable firm offer, then the
General Partners will attempt to obtain the necessary investor approval through
a proxy solicitation. If this approval is obtained and the assets are
subsequently sold, the Partnership will be dissolved.
<PAGE>
Under the terms of PSI's offer, PSI cannot purchase any tendered Units
prior to March 12, 1996. If you wish to withdraw any Units tendered to PSI at
any time prior to 5:00 p.m., E.S.T., on March 12, 1996, you may do so by
complying with the withdrawal procedures set forth in the PSI offer, an excerpt
of which is attached hereto.
Your General Partners will continue to act in the manner that they believe
to be in the best interests of the Partnership and the limited partners.
Very truly yours, Very truly yours,
/s/James R. Pruett /s/Thomas E. Meador
James R. Pruett, President Thomas E. Meador, Chairman
Colonial Storage 86, Inc. Balcor Storage Partners - 86
<PAGE>
Excerpts From "Offer to Purchase for Cash Up to 64,226 Limited Partnership
Interests of Balcor/Colonial Storage Income Fund - 86, at $200 Per Interest by
Public Storage, Inc."
Withdrawal Rights
Except as otherwise provided in the Offer, all tenders of Interests
pursuant to the Offer are irrevocable, provided that Interests tendered
pursuant to the Offer may be withdrawn at any time prior to the Expiration
Date. Tenders of Interests not accepted for payment by the Company pursuant to
the Offer may also be withdrawn at any time after March 24, 1996.
For withdrawal to be effective, a written or facsimile transmission notice
of withdrawal must be timely received by the Depositary at one of the addresses
set forth on the back cover of this Offer to Purchase. Any such notice of
withdrawal must specify the name of the person who tendered the Interests to be
withdrawn, the number of Interests to be withdrawn, and must be signed by the
person(s) who signed the Letter of Transmittal in the same manner as the Letter
of Transmittal was signed. The signature(s) on the notice of withdrawal must
be guaranteed by an eligible guarantor institution (a bank, stockbroker,
savings and loan association or credit union with membership in an approved
signature guarantee medallion program).
If acceptance for payment of, or payment for, Interests is delayed for any
reason or if the Company is unable to accept for payment, or pay for, Interests
for any reason, without prejudice to the Company's rights under the Offer,
tendered Interests may be retained by the Depositary on behalf of the Company
and may not be withdrawn except to the extent that tendering Interest Holders
are entitled to withdrawal rights as set forth herein, subject to Rule 14e-1(c)
under the Exchange Act, which provides that no person who makes a tender offer
shall fail to pay the consideration offered or return the securities deposited
by or on behalf of security holders promptly after the termination or
withdrawal of the tender offer.
All questions as to the form and validity (including timeliness of
receipt) of notices of withdrawal will be determined by the Company, in its
sole discretion, which determination shall be final and binding. Neither the
Company, the Depositary, nor any other person will be under any duty to give
notification of any defects or irregularities in any notice of withdrawal or
will incur any liability for failure to give any such notification.
Any Interests properly withdrawn will be deemed not to be validly tendered
for purposes of the Offer. Withdrawn Interests may be re-tendered, however, by
following any of the procedures described in the Offer at any time prior to the
Expiration Date.
Back Cover of Offer to Purchase
The Letter of Transmittal and any other required documents should be sent
or delivered by each Interest Holder to the Depositary at one of the addresses
set forth below:
<PAGE>
The Depositary for the Offer is:
The First National Bank of Boston
By Mail By Hand By Overnight Courier
The First National BancBoston Trust The First National
Bank of Company of New York Bank of
Boston 55 Broadway Boston
Shareholder Services 3rd Floor Corporate Agency &
P.O. Box 1872 New York, NY 10006 Reorganization
Mail Stop 45-01-19 150 Royall Street
Boston, MA 02105 Mail Stop 45-01-19
Canton, MA 02021
Any questions about the Offer to Purchase may be directed to be Soliciting
Agent at its telephone number set forth below:
The Soliciting Agent for the Offer is:
The Weil Company
(800) 478-2605
Any requests for assistance or additional copies of the Offer to Purchase
and the Letter of Transmittal may be directed to the Company at its address and
telephone number set forth below:
Public Storage, Inc.
600 North Brand Boulevard, Suite 300
Glendale, California 91203-1241
(800) 421-2856
(818) 244-8080
