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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of report: November 11, 1996
(Date of earliest event reported)
ENSTAR INCOME/GROWTH PROGRAM FIVE-B, L.P.,
A GEORGIA LIMITED PARTNERSHIP
(Exact name of registrant as specified in its charter)
GEORGIA COMMISSION FILE: 58-1713008
(State or other jurisdiction 0-16789 (I.R.S. Employer
of incorporation or organization) Identification No.)
10900 WILSHIRE BOULEVARD, 15TH FLOOR
LOS ANGELES, CALIFORNIA 90024
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES, INCLUDING ZIP CODE)
(310) 824-9990
(Registrant's phone number, including area code)
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ITEM 5. OTHER EVENTS
On or about October 31, 1996, Everest Cable Investors,
L.L.C. disseminated a letter stating its interest in acquiring up
to 2,931 units of limited partnership interests in Enstar
Income/Growth Program Five-B, L.P. (the "Registrant") for a price
of $37 per unit, less certain transaction costs. This offer was
made without the consent or involvement of the Registrant's
Corporate General Partner. The Corporate General Partner has
considered this offer, concluded that it is inadequate and,
accordingly, recommended that limited partners not accept the
offer. Pursuant to Rule 14e-2 promulgated under the Securities
Exchange Act of 1934, as amended, this recommendation and the
Corporate General Partner's bases therefor were conveyed to limited
partners in a letter dated November 11, 1996 which is filed as an
exhibit hereto and incorporated herein by this reference.
FORWARD-LOOKING STATEMENTS CONTAINED OR REFERRED TO IN THIS
REPORT ARE MADE PURSUANT TO THE SAFE HARBOR PROVISIONS OF SECTION
21E OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. INVESTORS
ARE CAUTIONED THAT SUCH FORWARD-LOOKING STATEMENTS INVOLVE RISKS
AND UNCERTAINTIES INCLUDING, WITHOUT LIMITATION, THE EFFECTS OF
LEGISLATIVE AND REGULATORY CHANGES; THE POTENTIAL OF INCREASED
LEVELS OF COMPETITION FOR THE PARTNERSHIP; TECHNOLOGICAL CHANGES;
THE PARTNERSHIP'S DEPENDENCE UPON THIRD-PARTY PROGRAMMING; THE
ABSENCE OF UNITHOLDER PARTICIPATION IN THE GOVERNANCE AND
MANAGEMENT OF THE PARTNERSHIP; THE MANAGEMENT FEES PAYABLE TO THE
CORPORATE GENERAL PARTNER; THE EXONERATION AND INDEMNIFICATION
PROVISIONS CONTAINED IN THE PARTNERSHIP AGREEMENT RELATING TO THE
CORPORATE GENERAL PARTNER; AND OTHER POTENTIAL CONFLICTS OF
INTEREST INVOLVING THE CORPORATE GENERAL PARTNER AND ITS
AFFILIATES; AND OTHER RISKS DETAILED FROM TIME TO TIME IN THE
PARTNERSHIP'S ANNUAL REPORT ON FORM 10-K AND OTHER PERIODIC REPORTS
FILED WITH THE COMMISSION.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA
FINANCIAL INFORMATION AND EXHIBITS
(c) Exhibits
5.1 Letter to Limited Partners dated November 11,
1996.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ENSTAR INCOME/GROWTH PROGRAM FIVE-B, L.P.
a Georgia limited partnership
By: Enstar Communications Corporation
General Partner
Date: November 11, 1996. By: /s/ Michael K. Menerey
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Michael K. Menerey
Chief Financial Officer
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5.1 Letter to Limited
Partners dated
November 11, 1996 5
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Exhibit 5.1
(Enstar Letterhead)
November 11, 1996
Dear Limited Partner:
Enstar Income/Growth Program Five-B, Ltd. (the "Partnership") has
become aware that an unsolicited offer for up to 2,931 units (representing
approximately 4.9% of the outstanding Units in the Partnership), at a price of
$37 per Unit, was commenced by Everest Cable Investors, L.L.C. ("Everest") in a
letter dated October 31, 1996. This offer was made without the consent or the
involvement of the Corporate General Partner.
Pursuant to rule 14e-2 under the Securities Exchange Act of 1934, we
are required to furnish you with our position with respect to the Everest
offer. We have considered this offer and, based on the very limited information
made available by Everest, believe that it is inadequate, not representative of
the inherent value of the Partnership's cable systems and not in your best
interest to accept. Accordingly, the Corporate General Partner's recommendation
is that you reject the Everest offer. We urge you not to sign the Agreement of
Transfer for Limited Partnership Interest Form that Everest sent to you and not
tender your Units to Everest. In evaluating the offer, the Corporate General
Partner believes that its limited partners should consider the following
information:
o The offering price for each limited partnership unit during the offering
period was $250 per unit. Cash distributions of approximately $26
per unit were paid from formation through April 13, 1990, at which time
distributions were terminated to preserve cash resources. In contrast, the
Everest offer is only $37 per unit. If Everest is successful in buying
Units at the price in its offer, Everest will own units at much lower
prices than virtually all of the current partners and, in our view, for
much less than they are worth. Limited partners should note that the
Partnership's cash flow (operating income before depreciation and
amortization) for the twelve months ended September 30, 1996 was
approximately $23 per unit. The Everest offer represents a valuation of
only approximately 3 times said cash flow (after adjustment for the excess
of total liabilities over current assets as of September 30, 1996).
o As of the date of this letter, the Corporate General Partner believes that
a reasonable range of valuation per limited partnership unit is between $82
and $127 based on the factors noted below. The Corporate General Partner
believes that Everest's offer price is inadequate because it is
significantly less than the $82 low end of the range provided. The
Corporate General Partner did not retain a third party to conduct an
evaluation of the Partnership's assets or otherwise obtain any appraisals.
Rather, the per unit valuations provided were derived by attributing a
range of multiples to the Partnership's cash flow (operating income before
depreciation and amortization) for the twelve months ended September 30,
1996, adjusted for the excess of total liabilities over current assets.
The Corporate General Partner has selected market multiples based on, among
other things, its understanding of the multiples placed on other
transactions involving comparable cable television properties and the
securities of companies in that industry. The Corporate General Partner's
belief as to the valuation range provided is necessarily based on economic,
industry and financial market conditions as they exist as of the date of
this letter, all of which are subject to change, and there can be no
assurance that the Partnership's cable properties could actually be sold at
a price within this range. Additionally, the valuations provided do not
give effect to any brokerage or other transaction fees that might be
incurred by the Partnership in any actual sale of the Partnership's system.
o Based on the information received by the Corporate General Partner, the $37
per unit offer by Everest is less than the price for which limited
partnership units were recently sold on the secondary market. Partnership
Spectrum, an independent industry publication, has reported that between
August 1, 1996 and September 30, 1996, 188 Units were sold on the secondary
market between a high of $45.50 per unit and a low of $40.50 per unit. In
the Corporate General Partner's opinion, the fact that the Everest offer is
being made at a discount
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from the most recent secondary market price available to the Corporate
General Partner only serves to underscore the inadequacy of the Everest
offer. In addition, the Corporate General Partner believes that the price
for units in the secondary market is not an accurate reflection of the fair
market value of such units due to the low volume of transactions in that
limited market and the legal and tax restrictions on such transfers.
For the reasons discussed above, the Corporate General Partner
believes that the Everest offer is not in the best interest of the limited
partners and recommends that you NOT transfer, agree to transfer, or tender any
units in response to Everest's offer.
If you have any questions regarding these matters or your investment,
please call our Investor Services Department at (800) 433-4287.
Sincerely,
Enstar Income/Growth Program Five-B, Ltd.
A Georgia Limited Partnership
cc: Account Representative
