SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________
SCHEDULE 14D-1/A
Tender Offer Statement Pursuant to Section 14(d)(1)
of the Securities Exchange Act of 1934
(AMENDMENT NO. 4)
___________________
PROMETHEUS INCOME PARTNERS, a California limited partnership
(Name of Subject Company)
PIP PARTNERS - GENERAL, LLC,
a California limited liability company
(Bidder)
UNITS OF LIMITED PARTNERSHIP INTEREST
(Title of Class of Securities)
742941 10 7
(CUSIP Number of Class of Securities)
___________________
Mr. Sanford N. Diller
PIP PARTNERS - GENERAL, LLC
350 Bridge Parkway,
Redwood City, California 94065-1517
(415) 596-5300
Copy to:
Samuel H. Gruenbaum, Esq.
Cox, Castle & Nicholson, LLP
2049 Century Park East, Twenty-Eighth Floor
Los Angeles, California 90067
(310) 277-4222
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications on Behalf of Bidder)
Calculation of Filing Fee
Transaction Valuation* Amount of Filing Fee
$4,455,000 $891
* For purposes of calculating the filing fee only. This
amount assumes the purchase of 9,000 units of limited partnership
interest ("Units") of the subject company for $495 per Unit in
cash.
[X] 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 date
of its filing.
Amount previously paid: $882 Filing party: PIP Partners -
General, LLC
Form or registration no.: Schedule 14D-1/A Date filed:
December 12, 1996
(Continued on following pages)
(Page 1 of 5 pages)
1. Name of Reporting Person; S.S. or I.R.S. Identification No.
of Above Person
PIP PARTNERS - GENERAL, LLC, a California limited liability
company
_________________________________________________________________
2. Check the Appropriate Box if a Member of a Group (See
Instructions)
(a) (b)
_________________________________________________________________
3. SEC Use Only
_________________________________________________________________
4. Sources of Funds (See Instructions)
AF; BK
_________________________________________________________________
5. Check Box if Disclosure of Legal Proceedings is Required
Pursuant to Item 2(e)
or 2(f)
_________________________________________________________________
6. Citizenship or Place of Organization
California
_________________________________________________________________
7. Aggregate Amount Beneficially Owned by Each Reporting Person
No Units of Limited Partnership Interest; however, an
affiliate of the Bidder (i.e. the sole general partner of the
Subject Company) owns a 5% interest in the distributable cash
from operations of the Subject Company and 15% interest in the
net proceeds from the sale or other disposition of the properties
owned by the Subject Company, subject in both cases to certain
priorities of the limited partners of the Subject Company.
_________________________________________________________________
8. Check Box if the Aggregate Amount in Row (7) Excludes
Certain Shares (See Instructions)
_________________________________________________________________
9. Percent of Class Represented by Amount in Row (7)
0% of the Limited Partnership Interests. 100% of the
general partnership interests of the Subject Company.
_________________________________________________________________
10. Type of Reporting Person (See Instructions)
00
AMENDMENT NO. 4 TO SCHEDULE 14D-1/A
This Amendment No. 4 amends the Tender Offer Statement on
Schedule 14D-1 filed with the Securities and Exchange Commission
("SEC") on November 8, 1996, as amended by Amendment No. 1 to
Schedule 14D-1 filed with the SEC on November 18, 1996, and as
further amended by Amendment No. 2 to Schedule 14D-1 filed with
the SEC on December 9, 1996, and Amendment No. 3 to Schedule 14D-
1/A filed with the SEC on December 12, 1996, by PIP Partners -
General, LLC, a California limited liability company (the
"Purchaser"), relating to the tender offer by the Purchaser to
purchase up to 9,000 of the issued and outstanding units of
limited partnership interest ("Units") of Prometheus Income
Partners, a California limited partnership (the "Partnership"),
to include the information set forth below.
Terms not otherwise defined herein shall have the meaning
ascribed to them in the Schedule 14D-1 and the Offer to Purchase.
ITEM 1. SECURITY AND SUBJECT COMPANY.
Item 1(b) is hereby supplemented and amended as follows:
The Purchase Price has been increased to $495 per Unit, net
to the seller in cash, without interest thereon and automatically
reduced by the aggregate amount of distributions per Unit, if
any, made or declared by the Partnership after November 8, 1996
and on or prior to the Expiration Date, which remains as January
3, 1997, midnight, New York, New York time, upon the terms and
subject to the conditions set forth in the Offer.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE
SUBJECT COMPANY.
Item 3(b) is hereby supplemented and amended as follows:
The information set forth in the letter to Limited Partners
which is attached hereto as Exhibit (a)(20) is incorporated
herein in its entirety by reference.
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Item 4(a) is hereby supplemented and amended as follows:
The total amount of the funds necessary to purchase the
maximum number of Units sought pursuant to the Offer has been
increased to $4,455,000. The information set forth under the
caption "PIP General Has The Funds" in the letter to Limited
Partners which is attached hereto as Exhibit (a)(20) is
incorporated herein in its entirety by reference.
ITEM 10. ADDITIONAL INFORMATION.
Item 10(f) is hereby supplemented and amended as follows:
The information set forth in the letter to Limited Partners,
dated December 18, 1996, and the press release dated December 19,
1996, copies of which are attached hereto as Exhibits (a)(20) and
(a)(21), respectively, is incorporated herein in its entirety by
reference.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
Item 11 is hereby supplemented and amended by adding the
following, copies of which are attached hereto as exhibits:
(a)(20) Letter, dated December 18, 1996, from PIP Partners-
General, LLC, to the Limited Partners of Prometheus Income
Partners.
(a)(21) Press Release, dated December 19, 1996.
SIGNATURES
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: December 18, 1996
PIP PARTNERS - GENERAL, LLC, a California limited liability
company
By: PromHill, Inc., a California corporation, its Manager
By:/s/ Sanford Diller/
Name Sanford Diller
Title: President
EXHIBIT INDEX
EXHIBIT
NO. TITLE
(a)(20) Letter, dated December 18, 1996, from PIP Partners-
General, LLC, to the Limited Partners of Prometheus Income
Partners.
(a)(21) Press Release, dated December 19, 1996.
EXHIBIT (a)(20)
PIP PARTNERS - GENERAL, LLC, AFFILIATE OF THE PARTNERSHIP,
INCREASES AND MATCHES $495 OFFER BY NON-AFFILIATE
Special Committee Urges Limited Partners to Hold or Sell Only to
PIP Partners - General, LLC
OFFER EXPIRES FRIDAY, JANUARY 3, 1997
No Income Tax Until 1997
PIP Partners - General, LLC ("PIP General"), an affiliate of
the General Partner of your partnership, Prometheus Income
Partners (the "Partnership"), has increased its offer to purchase
your Units to $495 per Unit (the "PIP General Tender Offer").
This price matches the offer made by an affiliate of Apollo
Realty Advisors, Prom Investment Partners L.L.C. (collectively
"Apollo") (the "Apollo Tender Offer"), which has no affiliation
with your Partnership or general partner.
You are urged to carefully consider the following before
making any decisions:
- - The Hardboard Siding Problem Affects the Value of Your
Units. Existence of the hardboard siding problem makes it
difficult and far less desirable to sell the Partnership
properties now. Fewer buyers would be interested, and those who
were would no doubt demand a substantial discount. This would
directly affect the value of your Units.
- - You Should Profit, Not Anyone Else, From Resolution. PIP
General and your general partner want you, not anyone else, to
profit the most from your investment. The value of the
Partnership's properties and the Units should increase if the
hardboard siding problem is successfully resolved. The Special
Committee of your general partner, as a basis for recommending
that you not sell your Units unless you must (and if you must,
then you should sell them to PIP General), relied on the
considerable experience that your general partner and its
affiliates have in dealing with the hardboard siding problem at
other properties in which they have material interests. Although
guaranties cannot be given, your general partner believes the
hardboard siding problem can be successfully resolved and intends
to do all that it can to achieve a successful resolution for the
Partnership. If you sell, you will not enjoy the benefits of
such a resolution.
- - It Is A Bet Worth Making. How big a bet is the hardboard
siding problem, Apollo asked in its letter to you on Friday,
December 13, inferring no doubt that you should sell now, get
out. Don't be fooled: PIP General and Apollo are each willing to
buy your Units now. Obviously both believe it is a bet worth
making.
- - Sell To The Experienced Party, PIP General, If You Have To
Sell. If you must sell, please tender your Units to PIP General
so that your general partner and its affiliates, who have
substantial experience in dealing with the hardboard siding
problem in other partnerships where they have significant
interests, continue to manage the hardboard siding problem to
the maximum advantage of everyone, including you if not all of
your Units are accepted in the tender offers. Remember, less
than half of the outstanding Units can be bought in both tender
offers, and if more than that is tendered, cutbacks will have to
be made.
- - Your General Partner and Affiliates Have the Experience And
Know-How. Mr. Sanford N. Diller and his affiliates, who
beneficially own your general partner and PIP General, have
substantial experience in managing the business and legal aspects
of the hardboard siding problem, including the complex litigation
of the type that your Partnership has already commenced due to
the problem. Mr. Diller and his affiliates have been pursuing
major litigation against manufacturers, subcontractors, insurers
and others as a result of use of the same type of hardboard
siding in other Northern California apartment projects where such
parties have investments. The lead case is scheduled for trial
in February 1997, and the strategies, settlement negotiations
(which have already commenced), and handling of the case will be
important to the Partnership and how it deals with its litigation
against many of the same parties. Your Partnership should
benefit from this knowledge and experience.
- - Apollo Does Not Have Your General Partner's Experience Or
Know-How. Apollo has no involvement in the hardboard siding
litigation, nor does it have the experience and know-how of your
general partner in managing the overall problem. It has not
addressed the importance to the Partnership and the Limited
Partners of (1) handling the hardboard siding problem as
described above, or (2) the skill, knowledge, and experience
possessed by affiliates of the general partner, including Maxim
Property Management, which manages the Partnership properties, in
dealing with the hardboard siding problem.
- - PIP General Has The Funds. PIP General and Mr. Diller have
unconditional funding available to them to buy 100% of the Units
tendered to PIP General. To confuse investors, Apollo suggested
in its December 13 letter that the funds are not available by
twisting Mr. Diller's additional, gratuitous gesture of providing
the Partnership with a letter from Bank of America indicating the
bank's willingness to provide the funds.
- - No Income Tax Consequence Until 1997 If You Tender To PIP
General. Any potential income tax gain you may have from the
sale of your Units pursuant to this Offer will be deferred into
the 1997 tax year, and as such you will not have any such gain
for the 1996 tax year. On the other hand, any such gain from
acceptance of the Apollo Tender Offer may be recognized in the
1996 tax year.
Limited Partners who have already tendered their Units to
PIP General will automatically receive the benefit of the $495
purchase price and need not take any further action. If you have
tendered in response to the Apollo Tender Offer and wish to
tender pursuant to the PIP General Tender Offer, you must
withdraw your tender to Apollo by delivering a completed Notice
of Withdrawal to The Herman Group, 2121 San Jacinto Street, 26th
Floor, Dallas, Texas 75201, fax nos. (214) 999-9348 and (214)
999-9323, no later than midnight, December 30, 1996, New York
City time. If you have not yet tendered your Units pursuant to
the PIP General Tender Offer, or you have withdrawn your tender
from Apollo and would like to tender to PIP General, please mail
or fax a completed and executed copy of the Letter of Transmittal
last provided to you by PIP General and all other documents
required by the Letter of Transmittal, and mail or deliver them
as follows:
BY MAIL: IBJ Schroder Bank & Trust Company
Bowling Green Station
New York, NY 10274-0084
Attn: Reorganization Operations Dept.
BY HAND DELIVERY OR
OVERNIGHT COURIER: IBJ Schroder Bank & Trust Company
One State Street
New York, NY 10004
Attn: Securities Processing Window,
Sub-Cellular One
Telephone: (212) 858-2103
Facsimile: (212) 858-2611
If you have any questions or comments, need any additional
forms, or if you receive any other offers, please call:
GEORGESON & COMPANY INC.
Wall Street Plaza
New York, NY 10005
Telephone: (800) 223-2064
PIP Partners - General, LLC, an affiliate of
the general partner of your Partnership
NEW RELEASE
Contact: Charles W. Garske, For Release
Georgeson & Company Inc. December 19, 1996
Telephone: (212) 440-9916
PIP PARTNERS-GENERAL, LLC INCREASES OFFER PRICE TO $495 PER UNIT
FOR PROMETHEUS INCOME PARTNERS
Redwood City, California, December 19, 1996. PIP Partners-
General, LLC (PIP General), announced today that it has increased
its tender offer price to $495 per Unit for up to 9,000
outstanding units of limited partnership interest (Units) in
Prometheus Income Partners (the Partnership). PIP General's
offer matches a competing offer from an affiliate of Apollo
Realty Advisors, which is not affiliated with the Partnership.
Limited Partners who have already tendered their Units to PIP
General will automatically receive the benefit of the $495
purchase price and need not take any further action.
A Special Committee of the Partnership's general partner has
recommended that it is in the best interest of the Partnership,
the Limited Partners, and the tenants and employees at the
Partnership's properties that those partners who have a current
or anticipated need or desire for liquidity should tender their
Units to PIP General; those partners who do not have such a need
or desire should retain their Units until the Partnership's
hardboard siding problem has been resolved.
The PIP General Offer, as increased, will remain open until
midnight, January 3, 1997, New York time. Any potential income
tax gain tendering Limited Partners may have from the sale of
their Units pursuant to the PIP General Offer will be deferred
into the 1997 tax year. As of the close of business on December
18, 1996, approximately 812 Units had been tendered to PIP
General and not withdrawn.
Limited Partners who have tendered in response to the
competing offer and who wish to tender pursuant to the PIP
General Offer must withdraw their tender in the competing offer
by delivering a completed Notice of Withdrawal to The Herman
Group no later than midnight, December 30, 1996, New York City
time. A Notice of Withdrawal has previously been mailed to all
Limited Partners. Further information, including additional
copies of a Notice of Withdrawal, may be obtained by calling
Georgeson & Company Inc. at 1-800-223-2064.
