SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14D-9
(Amendment No. 2)
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
(847)267-1600 (817)561-0100
(Name, Address and Telephone Number of Persons Authorized to
Receive Notice and Communications on Behalf of the Person(s)
Filing Statement)
Copy To:
Herbert S. Wander
Lawrence D. Levin
Katten Muchin & Zavis
Suite 1600
525 West Monroe Street
Chicago, Illinois 60661-3693
(312)902-5654
<PAGE>
Amendment No. 2 to Schedule 14D-9
This Amendment No. 2 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
April 26, 1996, and amended May 3, 1996. All capitalized terms used herein but
not otherwise defined shall have the meanings ascribed to such terms in the
Schedule 14D-9.
Item 4. The Solicitation and Recommendation
Item 4(b) is hereby amended to include the following additional
information:
(xii) On May 2, 1996, the Partnership received an unsolicited letter
from U-Haul International, Inc. ("U-Haul") stating that U-Haul is willing to
purchase the Partnership's properties for $69 million. The General Partners
thereafter notified STP of the U-Haul letter.
On May 3, 1996, the Partnership received a second letter from U-Haul.
This letter indicated that U-Haul would pay a cash price of $69 million for the
properties and that U-Haul has available bank lines in excess of $150 million
to finance the acquisition. U-Haul further stated that it would pay $7 million
as a good faith deposit and that it would pay $1.3 million in addition to the
$69 million purchase price "to release [the Partnership] from its existing
contract with STP."
On May 6, 1996, the General Partners formally notified STP of their
decision to investigate the U-Haul offer. The General Partners also offered
STP the opportunity to respond to the U-Haul offer with a higher purchase
price. STP declined to increase their offer.
The General Partners are presently negotiating the terms of a possible
sale of the properties to U-Haul. There can be no assurance that an agreement
will be reached with U-Haul. Unless and until a written agreement with U-Haul
is executed, the General Partners intend to cause the Partnership to sell the
properties to STP in accordance with the terms of the Purchase Agreement with
STP.
Like the sale to STP, a sale to U-Haul would require the approval of a
majority of the outstanding Units. Should an agreement with U-Haul be reached,
additional proxy material would be distributed to obtain the necessary Limited
Partner approval.
<PAGE>
Item 7. Certain Negotiations and Transactions by the Subject Company
See Item 4.
Item 9. Material to be Filed as Exhibits
Item 9 is hereby amended to including the following c(4) and c(5):
"(c)(4) Letter from U-Haul dated May 2, 1996.
(c)(5) Letter from U-Haul dated May 3, 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: May 8, 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>
U-HAUL INTERNATIONAL
2727 N. Central Ave.
P.O. Box 21502
Phoenix, AZ 85036-1502
(602)263-6811
Fax No.(602)263-6109
May 2, 1996
Via Facsimile 847-317-4462
Original Via US Mail/FEDEX
Mr. Thomas E. Meador
BALCOR
2355 Waukegan Road, Suite A200
Bannockburn, Illinois 60015
RE: Balcor/Colonial Storage Income Fund-86
Dear Mr. Meador:
This letter is to express U-Haul's revised offer to purchase the above
referenced properties for a cash price of $69,000,000. We currently have
available bank lines in excess of $150 million to finance the acquisition of
the subject portfolio. We hope as general partner you will relay this
information to the limited partners.
It is our understanding that the contract you have executed allows for the sale
to another party if such a sale is in the limited partner's best interest. We
are willing to pay the penalty, if any, that you may incur due to your release
from the existing contract, subject to our approval of the dollar amount of.
We have completed our due diligence and are willing to close promptly.
Please keep in mind that we will require NO financing of any sort and should be
able to close subject only to the issuance of title insurance.
Should your institution have an interest in pursuing this transaction please
respond. If you have any questions, please do not hesitate to contact me at
(800)528-0361.
Sincerely,
U-HAUL INTERNATIONAL, INC.
/s/ Donald Wm. Murney
Donald Wm. Murney
Chief Financial Officer and Treasurer
cc: Phillip Schechter
<PAGE>
U-HAUL INTERNATIONAL
2727 N. Central Ave.
P.O. Box 21502
Phoenix, AZ 85036-1502
(602)263-6811
Fax No.(602)263-6109
May 3, 1996
Via Facsimile 847-317-4462
Original Via US Mail/FEDEX
Mr. Thomas E. Meador
BALCOR
2355 Waukegan Road, Suite A200
Bannockburn, Illinois 60015
RE: Balcor/Colonial Storage Income Fund-86
Dear Mr. Meador:
I have clarified my offer dated May 2, 1996 per Messrs. Schechter and
Leiberman's request. U-Haul's revised offer to purchase the above referenced
properties is for a cash price of $69,000,000.00. We currently have available
bank lines in excess of $150 million to finance the acquisition of the subject
portfolio. I will be forwarding a letter to you from Chemical Bank verifying
our ability to fund this transaction. We are willing to pay a good faith
deposit of $7,000,000.00 that will be credited to the purchase price. We hope
as general partner you will relay this information to the limited partners.
It is our understanding that the contract you have executed allows for the sale
to another party if such a sale is in the limited partner's best interest.
Your company has represented that a break up fee of $1,300,000.00 will be due
to release you from the existing contract. Based upon this representation we
are willing to pay this fee. We have completed our due diligence and are
willing to close promptly. We have obtained all board of directors' approvals
necessary.
Please keep in mind that we will require NO financing of any sort and should be
able to close subject only to the issuance of title insurance. We will pay the
closing cost of the transaction such as title insurance, escrow fees, transfer
taxes, etc. We are willing to close immediately after you obtain investor
approval, however, we see no obstacles in closing the transaction within the
five to ten day time frame relayed to us by Mr. Schechter and Mr. Leiberman.
Should your institution have an interest in pursuing this transaction please
contact me at (800)528-0361 or in writing at the above address.
Sincerely,
U-HAUL INTERNATIONAL, INC.
/s/Donald Wm. Murney
Donald Wm. Murney
Chief Financial Officer and Treasurer
cc: Mr. Phillip Schechter
Mr. Al Leiberman
