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: July 22, 1997
(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 identification No.)
organization)
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 July 11, 1997, Madison Partnership Liquidity Investors 36,
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 $55 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 General Partner's bases
therefor were conveyed to limited partners in a letter dated July 22, 1997
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 July 22, 1997.
* * * *
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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: July 22, 1997. By: /s/ Michael K. Menerey
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Michael K. Menerey
Chief Financial Officer
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Sequentially
Numbered
Exhibit Description Page
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5.1 Letter to Limited 5
Partners dated
July 22, 1997
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(Enstar Letterhead)
July 22, 1997
Dear Limited Partner:
Enstar Income/Growth Program Five-B, Ltd. (the "Partnership") has
become aware that an unsolicited offer for up to approximately 2,931 units
(representing approximately 4.9% of the outstanding Units in the
Partnership), at a price of $55 per Unit, was commenced by Madison
Partnership Liquidity Investors 36, L.L.C. ("Madison") in a letter dated
July 11, 1997. 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 Madison
offer. We have considered this offer and, based on the very limited
information made available by Madison, 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 Madison offer. We urge you
not to sign the Agreement of Assignment Form that Madison sent to you and
not tender your Units to Madison. In evaluating the offer, the Corporate
General Partner believes that its limited partners should consider the
following information:
* 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 Madison offer is only $55 per unit. If Madison is
successful in buying Units at the bargain basement price in its offer,
Madison 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.
For example, lLimited 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 Madison offer represents a valuation of only approximately 4 times
said cash flow (after adjustment for the excess of total liabilities
over current assets as of September 30, 1996).
* 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 Madison'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
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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.
* 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. Should unitholders wish to sell their units, there are a
number of independent firms that trade interests of limited
partnership on the secondary market, including:
Napex American Partnership Services
800-356-2739 800-736-9797
Cuyler & Associates Nationwide Partnership Marketplace
800-274-9991 800-969-8996
DCC Securities Chicago Partnership Board
800-945-0440 800-272-6273
For the reasons discussed above, the Corporate General Partner believes
that the Madison 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 Madison'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
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