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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13E-4 A-1
ISSUER TENDER OFFER STATEMENT
(PURSUANT TO SECTION 13(E)(1) OF THE SECURITIES EXCHANGE ACT OF 1934)
BANYAN STRATEGIC LAND FUND II
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(NAME OF ISSUER AND PERSON FILING STATEMENT)
COMMON STOCK, $.01 PAR VALUE
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(TITLE OF CLASS OF SECURITIES)
06682R102
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(CUSIP NUMBER OF CLASS OF SECURITIES)
LEONARD G. LEVINE
PRESIDENT
BANYAN STRATEGIC LAND FUND II
150 SOUTH WACKER DRIVE, SUITE 2900
CHICAGO, ILLINOIS 60606
TELEPHONE: (312) 683-3670
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(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON
AUTHORIZED TO RECEIVE NOTICES AND COMMUNICATIONS
ON BEHALF OF THE PERSON FILING STATEMENT)
COPY TO:
MICHAEL J. CHOATE, ESQ.
SHEFSKY & FROELICH LTD.
444 NORTH MICHIGAN AVENUE, STE. 2500
CHICAGO, ILLINOIS 60611
(312) 527-4000
MAY 5, 1995
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(DATE TENDER OFFER FIRST PUBLISHED, SENT OR GIVEN TO SECURITY HOLDERS)
CALCULATION OF FILING FEE
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TRANSACTION VALUATION* AMOUNT OF FILING FEE
$17,000,000 $3,400
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*Assumes purchase of 10,000,000 shares at $1.70 per share.
/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 the date of its filing.
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Amount previously paid: $3,400 Filing Party: Banyan Strategic Land Fund II
Form or Registration No.: Schedule 13E-4 Date Filed: May 5, 1995
</TABLE>
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Page of Pages
Exhibit Index Appears on Page
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ITEM 1. SECURITY AND ISSUER.
(a) The name of the issuer is Banyan Strategic Land Fund II, a Delaware
corporation (the "Company"), which has its principal executive offices at 150
South Wacker Drive, Suite 2900, Chicago, Illinois 60606 (telephone number
(312) 683-3670).
(b) This schedule relates to the offer by the Company to purchase up to ten
million outstanding shares of its common stock, $.01 par value per share (the
"Shares"), at a price equal to $1.70 per Share, net to the seller in cash, upon
the terms and subject to the conditions set forth in the Offer to Purchase dated
May 5, 1995 (the "Offer to Purchase"), and related Letter of Transmittal, copies
of which are attached hereto as Exhibits (a)(1) and (a)(2), respectively. The
information contained in Sections 1, 9 and 11 of the Offer to Purchase is
incorporated herein by reference.
(c) The information set forth in Section 7 of the Offer to Purchase is
incorporated herein by reference.
(d) Not applicable.
ITEM 2. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a) The information set forth in Section 9 of the Offer to Purchase is
incorporated herein by reference.
(b) Not applicable.
ITEM 3. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE ISSUER OR
AFFILIATE.
(a) - (j) The information set forth under "Background and Purpose of the
Offer" and Sections 7 and 8 in the Offer to Purchase is incorporated herein by
reference.
ITEM 4. INTEREST IN SECURITIES OF THE ISSUER.
The information set forth in Section 11 of the Offer to Purchase is
incorporated herein by reference.
ITEM 5. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONS WITH RESPECT TO THE
ISSUER'S SECURITIES.
The information set forth under "Background and Purpose of the Offer,"
Sections 8 and 11 of the Offer to Purchase and in Exhibit (c)(1) is incorporated
herein by reference.
ITEM 6. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
The information set forth in Section 15 of the Offer to Purchase is
incorporated herein by reference.
ITEM 7. FINANCIAL INFORMATION.
(a) The financial information set forth in Section 10 of the Offer to
Purchase and in Exhibit (g)(1) hereto is incorporated herein by reference.
(b) The pro forma data set forth in Section 10 of the Offer to Purchase is
incorporated herein by reference.
ITEM 8. ADDITIONAL INFORMATION.
(a) See Item 5 above.
(b) The information set forth in Section 12 is incorporated herein by
reference.
(c) None.
(d) None.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
(a)(1) Form of Offer to Purchase dated May 5, 1995.*
(a)(2) Form of Letter of Transmittal dated May 5, 1995, together with
Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.*
(a)(3) Form of Notice of Guaranteed Delivery.*
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(a)(4) Form of letter from the Company to brokers, dealers, commercial
banks, trust companies and other nominees dated May 5, 1995.*
(a)(5) Form of letter from brokers, dealers, commercial banks and trust
companies to their clients dated May 5, 1995.*
(a)(6) Form of letter to stockholders from Leonard G. Levine, President of
the Company, dated May 5, 1995.*
(a)(7) Form of Summary Advertisement dated May 5, 1995.*
(a)(8) Press Release dated May 5, 1995.
(b) Not applicable.
(c)(1) Agreement dated May 17, 1993 by and among the Company, Dickstein &
Co., L.P. and Dickstein International Limited.*
(d) Not applicable.
(e) Not applicable.
(f) Not applicable.
(g)(1) The Company's 1994 Annual Report to Stockholders.*
* Previously filed with Schedule 13E-4 on May 5, 1995.
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this amended statement is true, complete and
correct.
BANYAN STRATEGIC LAND FUND II
By: /s/ LEONARD G. LEVINE
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Leonard G. Levine
President
Dated: May 12, 1995
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EXHIBIT INDEX
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EXHIBIT
NUMBER DESCRIPTION PAGE
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(a)(1) Form of Offer to Purchase dated May 5, 1995. *
(a)(2) Form of Letter of Transmittal dated May 5, 1995, together with Guidelines for *
Certification of Taxpayer Identification Number on Substitute Form W-9.
(a)(3) Form of Notice of Guaranteed Delivery. *
(a)(4) Form of letter from the Company to brokers, dealers, commercial banks, trust *
companies and other nominees dated May 5, 1995.
(a)(5) Form of letter from brokers, dealers, commercial banks and trust companies to *
their clients dated May 5, 1995.
(a)(6) Form of letter to stockholders from Leonard G. Levine, President of the *
Company, dated May 5, 1995
(a)(7) Form of Summary Advertisement dated May 5, 1995. *
(a)(8) Press Release dated May 5, 1995.
(c)(1) Agreement dated May 17, 1993 by and among the Company, Dickstein & Co., L.P. *
and Dickstein International Limited.
(g)(1) The Company's 1994 Annual Report to Stockholders. *
</TABLE>
* Previously filed with Schedule 13E-4 on May 5, 1995.
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EXHIBIT (a)(1)
OFFER TO PURCHASE FOR CASH
BY
BANYAN STRATEGIC LAND FUND II
UP TO TEN MILLION SHARES OF ITS COMMON STOCK
THE OFFER, THE PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL
EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON MONDAY,
JUNE 5, 1995, UNLESS THE OFFER IS EXTENDED.
Banyan Strategic Land Fund II, a Delaware corporation (the "Company"),
invites its stockholders to tender shares of its common stock, $.01 par value
per share (the "Shares"), at a price equal to $1.70 per Share (the "Purchase
Price"), net to the seller in cash, upon the terms and subject to the conditions
set forth herein and in the related Letter of Transmittal (which together
constitute the "Offer"). The Company will, upon the terms and subject to the
conditions of the Offer, purchase up to ten million Shares validly tendered
pursuant to the Offer, taking into account the number of Shares so tendered.
Upon the terms and subject to the conditions of the Offer, including the
provisions thereof relating to proration and "odd lot" tenders, the Company will
purchase Shares validly tendered at the Purchase Price and not withdrawn.
The Shares are included for quotation on the Nasdaq National Market (the
"NNM") under the symbol "VSLF." On May 4, 1995, the last full day of trading
prior to the announcement of the Offer, the closing sales price of the Shares on
the NNM was $1.31 per Share. Stockholders are urged to obtain a current market
quote for the Shares.
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THE OFFER IS NOT CONDITIONED UPON ANY MINIMUM
NUMBER OF SHARES BEING TENDERED. THE OFFER IS, HOWEVER,
SUBJECT TO CERTAIN OTHER CONDITIONS. SEE SECTION 6.
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IMPORTANT
Any stockholder desiring to accept the Offer should either (1) request his
or her broker, dealer, commercial bank, trust company or nominee to effect the
transaction for him or her or (2) complete the Letter of Transmittal or a
facsimile thereof, sign it in the place required, have his or her signature
thereon guaranteed if required by the Letter of Transmittal and forward it and
any other required documents to the First Chicago Trust Company of New York (the
"Depositary"), and either deliver the certificates for the Shares being tendered
to the Depositary along with the Letter of Transmittal or tender such Shares
pursuant to the procedure for book-entry transfer set forth in Section 3 hereof.
Stockholders having Shares registered in the name of a broker, dealer,
commercial bank, trust company or other nominee must contact that person if they
desire to tender their Shares. Stockholders who wish to tender Shares and whose
certificates are not immediately available should tender such Shares by
following the procedures for guaranteed delivery set forth in Section 3 hereof.
Questions and requests for assistance or for additional copies of this
Offer to Purchase, the Letter of Transmittal and Notice of Guaranteed Delivery
may be directed to Georgeson & Company Inc. (the "Information Agent") at the
address and telephone number set forth on the back cover of this Offer to
Purchase.
NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO
ANY STOCKHOLDER WHETHER TO TENDER ALL OR ANY SHARES. THE COMPANY HAS BEEN
INFORMED THAT AFFILIATES OF CERTAIN DIRECTORS OF THE COMPANY INTEND TO TENDER
SHARES PURSUANT TO THE OFFER. SEE SECTION 8. EACH STOCKHOLDER MUST MAKE HIS OR
HER OWN DECISION WHETHER TO TENDER SHARES AND, IF SO, HOW MANY SHARES TO TENDER.
SEE "BACKGROUND AND PURPOSE OF THE OFFER -- OFFER PRICE."
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May 5, 1995
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NO PERSON HAS BEEN AUTHORIZED TO MAKE ANY RECOMMENDATION ON BEHALF OF THE
COMPANY AS TO WHETHER STOCKHOLDERS SHOULD TENDER SHARES PURSUANT TO THE OFFER.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS IN CONNECTION WITH THE OFFER OTHER THAN THOSE CONTAINED HEREIN
OR IN THE LETTER OF TRANSMITTAL. ANY RECOMMENDATION, INFORMATION OR
REPRESENTATIONS SO GIVEN OR MADE MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY.
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TABLE OF CONTENTS
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PAGE
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BACKGROUND AND PURPOSE OF THE OFFER................................................... 5
Background.......................................................................... 5
Purpose of the Offer................................................................ 6
THE OFFER............................................................................. 7
1. Number of Shares; Proration; Extension of Offer................................. 7
2. Tenders by Holders of Fewer Than 100 Shares..................................... 8
3. Procedure for Tendering Shares.................................................. 8
4. Withdrawal Rights............................................................... 10
5. Acceptance for Purchase of Shares and Payment of Purchase Price................. 11
6. Certain Conditions of the Offer................................................. 12
7. Price of Shares................................................................. 13
8. Certain Effects of the Offer.................................................... 13
9. Source and Amount of Funds...................................................... 14
10. Certain Information Concerning the Company...................................... 14
11. Transactions and Agreements Concerning the Shares............................... 19
12. Regulatory Approvals............................................................ 19
13. Certain Federal Income Tax Consequences......................................... 19
14. Extension of Tender Period; Termination; Amendments............................. 21
15. Fees............................................................................ 22
16. Miscellaneous................................................................... 22
</TABLE>
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To the Holders of Common Stock of
Banyan Strategic Land Fund II
Banyan Strategic Land Fund II, a Delaware corporation (the "Company"),
invites its stockholders to tender shares of its common stock, $.01 par value
per share (the "Shares"), at a price equal to $1.70 per Share, net to the seller
in cash, upon the terms and conditions of the Offer.
The Company will purchase up to ten million Shares (or such lesser number
as are validly tendered at the Purchase Price). Each stockholder who has
properly tendered and not withdrawn Shares at the Purchase Price will receive
the Purchase Price, net to the stockholder in cash, with respect to all Shares
purchased, upon the terms and subject to the conditions of the Offer, including
the provisions relating to proration and "odd lot" tenders described below. If,
prior to the Expiration Date (as defined herein), more than ten million Shares
(or such greater number of Shares as the Company may elect to purchase) are
properly tendered and not withdrawn, the Company will, upon the terms and
subject to the conditions of the Offer, accept Shares for purchase first from
"odd lot" holders (as described in Section 2) who properly tender their Shares
at the Purchase Price and then on a pro rata basis from other stockholders whose
Shares are properly tendered at the Purchase Price and not withdrawn. Shares not
purchased because of proration will be returned.
Tendering stockholders will not be obligated to pay brokerage commissions,
solicitation fees or, subject to the Instructions to the Letter of Transmittal,
stock transfer taxes on the purchase of Shares by the Company. The Company will
pay all charges and expenses of the Depositary and the Information Agent
incurred in connection with the Offer.
THE OFFER IS NOT CONDITIONED UPON ANY MINIMUM NUMBER OF SHARES BEING
TENDERED. THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS. SEE
SECTION 6. NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY
RECOMMENDATION TO ANY STOCKHOLDER WHETHER TO TENDER ALL OR ANY SHARES. THE
COMPANY HAS BEEN INFORMED THAT AFFILIATES OF CERTAIN DIRECTORS OF THE COMPANY
INTEND TO TENDER SHARES PURSUANT TO THE OFFER. SEE SECTION 8. EACH STOCKHOLDER
MUST MAKE HIS OR HER OWN DECISION WHETHER TO TENDER SHARES AND, IF SO, HOW MANY
SHARES TO TENDER. SEE "BACKGROUND AND PURPOSE OF THE OFFER -- OFFER PRICE."
As of May 2, 1995, the Company had issued and outstanding 19,263,596 shares
of common stock and an additional 345,000 shares of common stock were issuable
upon exercise of stock options (28,050 of which are currently exercisable).
Assuming a purchase of ten million Shares, the Company will purchase
approximately 52% of its outstanding common stock (exclusive of Shares issuable
upon exercise of stock options). The Shares are included for quotation on the
Nasdaq National Market (the "NNM"). On May 4, 1995, the last full day of trading
prior to announcement of the Offer, the closing price of the Shares as reported
on the NNM was $1.31 per Share. See Section 7. Stockholders are urged to obtain
a current market quotation for the Shares.
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BACKGROUND AND PURPOSE OF THE OFFER
BACKGROUND
On March 16, 1995, the Company and its subsidiary, VSLF II Key Biscayne
Hotel Corp., entered into an agreement with THSP Associates Limited Partnership
II, formerly known as Banyan Mortgage Investors L.P. III, and its affiliate,
VMLP III Key Biscayne Villas Limited Partnership, resolving the litigation
between the parties which had arisen in connection with each party's investment
in land parcels located in Key Biscayne, Florida (the "Key Biscayne
Settlement"). Pursuant to the Key Biscayne Settlement, the Company received
consideration valued at $24.7 million, including cash proceeds of approximately
$21.5 million (the "Gross Proceeds").
On March 21, 1995, the Board of Directors of the Company (the "Board") met
to consider the Company's business strategy, financial condition and prospects
in light of the Key Biscayne Settlement. The Board concluded that long-term
stockholder value was best served by not reinvesting any of the Gross Proceeds
in new real estate investments. Instead, the Board decided that the Company
should utilize a portion of the Gross Proceeds to pay the Company's on-going
operating expenses and the expenses associated with the Company's existing real
estate investments while distributing the remaining amount to the stockholders.
The Board then directed management to determine the amount of funds needed for
these purposes and to review and evaluate the mechanisms for distributing the
remaining proceeds to the stockholders.
In response, management reviewed the advantages and disadvantages of a
dividend payable to all stockholders on a pro rata basis, an open-market
repurchase program and an issuer tender offer. On April 28, 1995, the Board met
with management to discuss the various options. Management reported that during
the past twelve months, there had been extremely limited trading in the Shares
on the NNM and hence reduced liquidity in comparison to prior periods.
Management further reported that a cash dividend would not effect the liquidity
of the Shares and, therefore, would not provide stockholders desiring to sell
their Shares an opportunity to do so at prices which management believes are
more representative of the Company's inherent value.
Management stated that, in its view, a repurchase program would enhance
liquidity only to a limited extent over the term of the repurchase program.
Management pointed out that a repurchase program would be subject to a number of
restrictions imposed by the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), therefore reducing the likelihood of a substantial increase in
liquidity with a repurchase program. Management explained that the Exchange Act
limits the number of shares that an issuer may repurchase at any one time
without commencing a formal tender offer. In addition, the Exchange Act limits
the price which could be paid for shares purchased under a repurchase program
based upon existing prices on a national securities exchange. Management also
informed the Board that the Company would likely incur commissions of
approximately $.04 per Share on each Share repurchased under a repurchase
program. Management explained that these restrictions would increase the cost of
a distribution to stockholders without any appreciable impact on liquidity.
Finally, management reported that a cash tender offer would, in its view,
best enhance stockholder value over the long term. Management noted that a cash
tender offer would neither be subject to the volume limitations imposed on
repurchase programs under the Exchange Act, nor would the stockholders incur any
brokerage commissions in connection with sales to the Company pursuant to a
tender offer. Further, management explained that a tender offer is likely the
only way for a stockholder (desiring to sell at this time) to sell its shares at
a price approximating the present value of projected liquidation proceeds.
OFFER PRICE
Management concluded, based on its analysis of the Company's working
capital needs and the Company's business plan for the next twenty-four months,
that approximately $4.5 million was necessary to pay the Company's on-going
operating expenses and the entitlement costs associated with Rancho Malibu
resulting in approximately $17.0 million available for current distribution to
the stockholders (the "Distributable Cash"). Next, management assumed the
purchase of ten million shares at the Purchase Price which was arbitrarily set
at a slight premium to the market price as reported on the NNM during the thirty
days
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preceding the Offer. To test the reasonableness of the Purchase Price,
management then compared the Distributable Cash to the amounts which it believes
would be available for distribution (on a per Share basis adjusted for the
Offer) following sale of the Company's properties. Management explained that
based on its review of the Company's property business plans, the Company will
likely dispose of its holdings in the H-Street Assemblage, Rancho Malibu and
Anden properties (the "Properties") by December 31, 1996. Management noted that
in the case of Rancho Malibu, it is possible that the property will be developed
in conjunction with a third party willing to finance development and holding
costs if entitlements are obtained. To date, the Company has not had any
discussions with potential joint venture partners and does not anticipate having
such discussions until entitlements are obtained which will likely not occur
prior to May 30, 1996. Assuming that all of these properties are sold for prices
approximating each property's carrying value as of December 31, 1994 and
assuming that Rancho Malibu is entitled but not developed, management projected
that the Company would likely have a total of approximately $21.7 million, or
$2.34 per Share, as of December 31, 1996 in proceeds available for distribution
to the stockholders (the "Projected Distribution Amount").
Next, management advised the Board that, assuming a discount rate of 12% is
applied to the Projected Distribution Amount, which management concluded was
reasonable in light of the equity returns available in the equity market at this
time, the net present value of the Projected Distribution Amount was $1.87 as of
April 1, 1995. Management cautioned that if the Company is unable to
successfully complete entitlement of the Rancho Malibu property and is,
therefore, forced to sell the property in its unentitled state, the total
proceeds available for distribution to the stockholders by December 31, 1996
would likely decline to approximately $14.9 million or $1.62 per Share (the
"Adjusted Distribution Amount"). Utilizing the same 12% discount rate,
management advised the Board that the net present value of the Adjusted
Distribution Amount was approximately $1.29 as of April 1, 1995.
Management noted the Board that the Purchase Price is slightly above the
average $1.58 of the Projected Distribution Amount and the Adjusted Distribution
Amount on a discounted basis. Management explained to the Board that a Purchase
Price slightly above the midpoint is justified since management believes that
entitlement of the Rancho Malibu property will be completed in a timely fashion
and at the cost projected by management. THERE CAN BE NO ASSURANCE THAT THE
PROPERTIES WILL BE SOLD FOR PRICES APPROXIMATING THEIR RESPECTIVE CARRYING
VALUES OR THAT DISTRIBUTIONS, IF ANY, FOLLOWING SALE OF THE PROPERTIES WILL BEAR
ANY RELATIONSHIP TO THE DISTRIBUTIONS PROJECTED HEREIN EITHER IN AMOUNT OR IN
TIMEFRAMES. ACTUAL SALES PRICES FOR THE PROPERTIES MAY BE MATERIALLY LOWER THAN
CARRYING VALUES AS OF DECEMBER 31, 1994 AND, THEREFORE, DISTRIBUTIONS FOLLOWING
SALE OF THE PROPERTIES MAY BE MATERIALLY LESS THAN AS PROJECTED ABOVE.
PURPOSE OF THE OFFER
The Company is making the Offer because the Board believes that the Offer
represents an opportunity to distribute cash to the Company's stockholders,
permitting them to invest it according to their preferences and objectives and,
therefore, enhance stockholder value. After considering other alternatives, such
as retaining the proceeds for reinvestment in new real estate investments,
paying a cash dividend or purchasing Shares in an open market repurchase
program, the Board concluded that the Offer was the preferable alternative for
enhancing stockholder value.
The Offer provides stockholders with an opportunity to sell Shares at a
price greater than market prices prevailing prior to announcement of the Offer
without the usual transaction costs associated with open-market sales. The Offer
also allows stockholders to sell a portion of their Shares while retaining a
continuing equity interest in the Company if they so desire. Any stockholder
owning an aggregate of less than 100 Shares whose Shares are purchased pursuant
to the Offer not only will avoid paying any brokerage commissions, but also will
avoid paying any applicable odd lot discounts payable on sales of odd lots on
the NNM. To the extent that the purchase of Shares in the Offer reduces the
number of stockholders of record, the Company's cost of servicing its
stockholder base may be reduced.
Stockholders whose Shares are not purchased in the Offer will realize an
increase in their percentage ownership interest in the Company and thus, in the
Company's future earnings and assets. As a result,
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increases or decreases in net earnings will result in proportionately greater
increases or decrease in earnings per share. Management believes that the
projected future cash flows, together with the portion of the Gross Proceeds
which are not utilized to fund purchases of Shares pursuant to the Offer (the
"Net Proceeds") will be sufficient to meet the Company's reasonably anticipated
working capital needs over the next twenty-four months. See Section 8 for
information regarding certain effects of the Offer on the market for the Shares.
NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO
ANY STOCKHOLDER AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING ANY OR ALL OF
SUCH STOCKHOLDER'S SHARES AND HAS NOT AUTHORIZED ANY PERSON TO MAKE ANY
RECOMMENDATION. STOCKHOLDERS ARE URGED TO EVALUATE CAREFULLY ALL INFORMATION IN
THE OFFER, CONSULT THEIR OWN INVESTMENT AND TAX ADVISORS AND MAKE THEIR OWN
DECISIONS WHETHER TO TENDER SHARES AND, IF SO, HOW MANY SHARES TO TENDER. SEE
"-- OFFER PRICE" ABOVE.
Shares acquired by the Company pursuant to the Offer will be returned to
the status of authorized and unissued Shares and will be available for the
Company to reissue without further stockholder action (except as required by
applicable law or NASDAQ rules and regulations governing shares which are
included for quotation on the NNM or any other securities exchange on which the
Shares are then listed). These Shares could be issued without stockholder
approval for such purposes as, among others, acquiring other businesses, raising
additional capital for use in the Company's business, a stock dividend and
implementing, or satisfying obligations under employee benefit plans or employee
contracts. The Company has no current plans to reissue the Shares it may acquire
pursuant to the Offer or issue any other authorized but unissued shares.
THE OFFER
1. NUMBER OF SHARES; PRORATION; EXTENSION OF OFFER. Upon the terms and
subject to the conditions described herein and in the Letter of Transmittal, the
Company will purchase up to ten million Shares that are validly tendered and not
withdrawn prior the later of 12:00 midnight, New York City time, on Monday, June
5, 1995, or the latest time and date to which the Offer is extended (the
"Expiration Date"). For a description of the Company's right to extend the
period of time during which the Offer is open or to delay, terminate or amend
the Offer, see Sections 6 and 14. Only Shares validly tendered prior to the
Expiration Date will be eligible for purchase. If the Offer is oversubscribed as
described below, only Shares validly tendered prior to the Expiration Date will
be eligible for proration. Although the Company reserves the right, it does not
plan to purchase more than ten million Shares pursuant to the Offer.
In accordance with Instruction 4 of the Letter of Transmittal, each
stockholder who wishes to partially tender Shares must specify the number of
Shares which the stockholder is willing to tender. All Shares purchased pursuant
to the Offer will be purchased at the Purchase Price. All Shares not purchased
pursuant to the Offer because of proration will be returned to the tendering
stockholders at the Company's expense as promptly as practicable following the
Expiration Date.
Upon the terms and subject to the conditions of the Offer, if less than ten
million Shares are validly tendered at the Purchase Price and not withdrawn
prior to the Expiration Date, then the Company will purchase all tendered
Shares. Upon the terms and subject to the conditions of the Offer, if more than
ten million Shares are validly tendered at the Purchase Price and not withdrawn
prior to the Expiration Date, the Company will purchase Shares in the following
order of priority:
(a) all Shares tendered and not withdrawn prior to the Expiration Date
by any stockholder who owned beneficially an aggregate of fewer than 100
Shares as of the close of business on May 2, 1995, and who validly tenders
all such Shares (partial tenders will not qualify for this preference) and
completes the box captioned "Odd Lots" on the Letter of Transmittal and, if
applicable, on the Notice of Guaranteed Delivery (See Section 2); and
(b) after purchase of all of the foregoing Shares, all other Shares
validly tendered and not withdrawn prior to the Expiration Date on a pro
rata basis, if necessary (with appropriate adjustments to avoid purchases
of fractional Shares).
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The Company does not expect that it will be able to announce the final
proration factor or to pay for any Shares purchased pursuant to the Offer until
approximately seven trading days after the Expiration Date if proration of
tendered Shares is required because of the difficulty in determining the number
of Shares validly tendered (including Shares tendered pursuant to the guaranteed
delivery procedure described in Section 3) and not withdrawn prior to the
Expiration Date and as a result of the "odd lot" procedure described in Sections
2 and 3. Preliminary results of proration will be announced by press release as
promptly as practicable after the Expiration Date. Holders of Shares may obtain
preliminary information from the Information Agent and may also be able to
obtain this information from their brokers.
The Company expressly reserves the right, in its sole discretion, at any
time or from time to time, to extend the period of time during which the Offer
is open by giving oral or written notice of the extension to the Depositary. See
Section 14. There can be no assurance, however, that the Company will exercise
its right to extend the Offer. If the Company decides, in its sole discretion,
to increase (except for any increase not in excess of 2% of the outstanding
Shares) or decrease the number of Shares being sought or to increase or decrease
the consideration offered to holders of Shares and, at the time that notice of
the increase or decrease is first published, sent or given to holders of Shares
in the manner specified below, the Offer is scheduled to expire at any time
earlier than the tenth business day from the date that the notice is first so
published, sent or given, the Offer will be extended until the expiration of the
ten-business-day period. For purposes of the Offer, a "business day" means any
day other than a Saturday, Sunday or federal holiday and consists of the time
period from 12:01 a.m. through 12:00 midnight, New York City time.
2. TENDERS BY HOLDERS OF FEWER THAN 100 SHARES. All Shares validly
tendered and not withdrawn by or on behalf of persons who beneficially owned an
aggregate of fewer than 100 Shares on May 2, 1995 ("Odd Lot Owners"), and who
validly tender all their Shares and do not withdraw any of these Shares by the
Expiration Date, will be accepted before proration, if any, of the purchase of
other tendered Shares. This preference is not available for partial tenders or
to beneficial holders of 100 or more Shares, even if these holders have separate
stock certificates for fewer than 100 Shares. By accepting the Offer, a
stockholder owning beneficially fewer than 100 Shares will avoid paying of
brokerage commissions and any applicable odd lot discount payable on a sale of
Shares in a transaction effected on a securities exchange.
As of May 2, 1995, there were approximately 9,169 holders of record of
Shares, of which 747 holders, holding in the aggregate approximately 34,599
Shares, held fewer than 100 Shares. Because of the large number of Shares held
in the names of brokers and nominees, the Company is unable to estimate the
number of beneficial owners of fewer than 100 Shares or the aggregate number of
Shares they own. Any stockholder wishing to tender all of his or her Shares
pursuant to this Section should complete the box captioned "Odd Lots" on the
Letter of Transmittal and, if applicable, on the Notice of Guaranteed Delivery.
3. PROCEDURE FOR TENDERING SHARES. Proper Tender of Shares. For Shares to
be properly tendered pursuant to the Offer: (i) a properly completed and fully
executed Letter of Transmittal (or facsimile thereof) and any other documents
required by the Letter of Transmittal must be received by the Depositary at one
of its addresses set forth on the back cover of this Offer to Purchase and
either: (a) certificates for the Shares to be tendered must be received by the
Depositary at one of its addresses; or (b) the Shares must be delivered pursuant
to the procedures for book-entry transfer described below (and a confirmation of
such delivery received by the Depositary), in each case by the Expiration Date;
or (ii) the tendering stockholder must comply with guaranteed delivery procedure
described below.
As specified in Instruction 4 of the Letter of Transmittal, each
stockholder desiring to partially tender Shares pursuant to the Offer must
indicate in the box entitled "Number of Shares Tendered" on the Letter of
Transmittal the number of Shares which are being tendered. Odd Lot Owners who
tender their Shares must complete the section entitled "Odd Lots" in the Letter
of Transmittal and, if applicable, on the Notice of Guaranteed Delivery, in
order to qualify for the preferential treatment available to Odd Lot Owners as
set forth in Section 2.
Notwithstanding any other provisions hereof, payment for Shares tendered
and accepted for purchase pursuant to the Offer will be made only after timely
receipt by the Depositary of certificates for the tendered Shares (or a timely
confirmation of a book-entry transfer of the Shares into the Depositary's
account at one of
8
<PAGE> 9
the Book-Entry Transfer Facilities, as defined below), a properly completed and
duly executed Letter of Transmittal (or facsimile thereof) with any required
signature guarantees and any other documents required by the Letter of
Transmittal.
Book Entry Delivery. The Depositary will establish accounts with respect
to the Shares at The Depository Trust Company, Midwest Securities Trust Company
and Philadelphia Depository Trust Company (collectively referred to as the
"Book-Entry Transfer Facilities") for purposes of the Offer within two business
days after the date of this Offer to Purchase, and any financial institution
that is a participant in the system of any Book-Entry Transfer Facility may make
delivery of Shares by causing the Book-Entry Transfer Facility to transfer the
Shares into the Depositary's account in accordance with the procedures of each
Book-Entry Transfer Facility. Although delivery of Shares may be effected
through book-entry transfer, a properly completed and duly executed Letter of
Transmittal (or facsimile thereof) and any other required documents must, in any
case, be received by the Depositary at one of its addresses set forth on the
back cover of this Offer to Purchase by the Expiration Date, or the tendering
stockholder must comply with the guaranteed delivery procedure described below.
Delivery of the Letter of Transmittal and any other required documents to a
Book-Entry Transfer Facility does not constitute delivery to the Depositary.
Method of Delivery. The tendering stockholder is responsible for selecting
the method of delivering all documents and assumes all risks associated
therewith. Stockholders tendering by mail should properly insure all documents
and send via registered mail, return receipt requested.
Signature Guarantees. Except as provided below, all signatures on a Letter
of Transmittal must be guaranteed by a financial institution (including most
banks, savings and loans associations and brokerage houses) which is a
participant in the Securities Transfer Agents Medallion Program or the Stock
Exchanges Medallion Program (an "Eligible Institution"). Signatures on a Letter
of Transmittal need not be guaranteed if: (i) the Letter of Transmittal is
signed by the registered holder of the Shares tendered therewith and the holder
has not completed either the box entitled "Special Payment Instructions" or the
box entitled "Special Delivery Instructions" on the Letter of Transmittal; or
(ii) the Shares are tendered for the account of an Eligible Institution. See
Instructions 1 and 2 of the Letter of Transmittal.
Guaranteed Delivery. If a stockholder desires to tender Shares pursuant to
the Offer but cannot deliver both the Shares and all other required documents to
the Depositary by the Expiration Date, the stockholder may tender the Shares if:
(i) the tender is made by or through an Eligible Institution; (ii) a properly
completed and duly executed Notice of Guaranteed Delivery substantially in the
form provided by the Company is received by the Depositary by the Expiration
Date; and (iii) certificates for the Shares (or a confirmation of a book-entry
transfer of the Shares into the Depositary's account at one of the Book-Entry
Transfer Facilities), together with a properly completed and duly executed
Letter of Transmittal (or facsimile thereof) and any other documents required by
the Letter of Transmittal, are received by the Depositary within five trading
days after executing the Notice of Guaranteed Delivery.
The Notice of Guaranteed Delivery may be delivered by hand or transmitted
by telegram, facsimile transmission or mail to the Depositary and must include a
guarantee by an Eligible Institution in the form set forth in the Notice of
Guaranteed Delivery.
Federal Income Tax Withholding. Under the federal income tax backup
withholding rules, unless an exemption applies under the applicable law and
regulations, 31% of the gross proceeds payable to a stockholder or other payee
pursuant to the Offer must be withheld and remitted to the United States
Treasury, unless the stockholder or other payee provides his or her taxpayer
identification number (employer identification number or social security number)
to the Depositary and certifies that the number is correct. Therefore, unless an
exception exists and is proven in a manner satisfactory to the Depositary, each
tendering stockholder should complete and sign the Substitute Form W-9 included
as part of the Letter of Transmittal to avoid backup withholding. Certain
stockholders such as corporations and certain foreign individuals are not
subject to these backup withholding and reporting requirements. See Section 13
for a more detailed discussion of federal income tax consequences and
Instruction 9 of the Letter of Transmittal for procedures to be followed
regarding federal income tax withholding.
9
<PAGE> 10
Gross proceeds payable to a foreign stockholder pursuant to the Offer or
his or her agent will not be subject to withholding of federal income tax. For
this purpose, a foreign stockholder is any stockholder that is not: (i) a
citizen or resident of the United States; (ii) a corporation, partnership or
other entity created or organized in or under the laws of the United States; or
(iii) an estate or trust the income of which is subject to United States federal
income taxation regardless of its source. Foreign stockholders are urged to
consult their tax advisors.
ANY TENDERING STOCKHOLDER OR OTHER PAYEE WHO FAILS TO FULLY COMPLETE AND
SIGN THE SUBSTITUTE FORM W-9 INCLUDED IN THE LETTER OF TRANSMITTAL MAY BE
SUBJECT TO REQUIRED FEDERAL INCOME TAX WITHHOLDING OF THE GROSS PROCEEDS PAYABLE
TO THE STOCKHOLDER OR OTHER PAYEE PURSUANT TO THE OFFER. SEE SECTION 13.
Tender Constitutes An Agreement. The tender of Shares pursuant to any one
of the procedures described above will constitute acceptance of the terms and
conditions of the Offer by the tendering stockholder and an agreement between
the tendering stockholder and the Company upon the terms and subject to the
conditions of the Offer, including the tendering stockholder's representation
and warranty that: (i) the stockholder owns the Shares being tendered within the
meaning of Rule 13e-4 under the Exchange Act; and (ii) the tender of the Shares
complies with Rule 13e-4.
Under Rule 14e-4 of the Exchange Act, a person may not, directly or
indirectly, tender Shares for his own account unless the person tendering: (i)
has a net long position equal to or greater than the number of (x) Shares
tendered or (y) other securities immediately convertible into, or exercisable or
exchangeable for, the number of Shares tendered and will acquire the Shares for
tender by conversion, exercise or exchange of other securities; and (ii) will
cause the Shares to be delivered in accordance with the terms of the Offer. Rule
14e-4 provides a similar restriction applicable to the tender or guarantee of a
tender on behalf of another person. The tender of Shares pursuant to any one of
the procedures described above will constitute the tendering stockholder's
representation and warranty that: (i) the stockholder has a net long position in
the Shares being tendered within the meaning of Rule 14e-4 under the Exchange
Act; and (ii) the tender of those Shares complies with Rule 14e-4.
Determination of Validity; Rejection of Shares; Waiver of Defects; No
Obligation to Give Notice of Defects. All questions as to the Purchase Price,
the number of Shares accepted, the form of documents and the validity,
eligibility (including time of receipt) and acceptance for payment of any
tendered Shares will be determined by the Company in its sole discretion. All
these determinations will be final and binding on all parties. The Company
reserves the absolute right to reject any or all tenders which it determines are
not in proper form, or the acceptance of which or payment for which may, in the
opinion of the Company's counsel, be unlawful. The Company also reserves the
absolute right to waive any defect or irregularity in the tender of any
particular Shares. The Company's interpretation of the terms of the Offer
(including the instructions in the Letter of Transmittal) will be final and
binding on all parties. No tender of Shares will be deemed to be properly made
until all defects and irregularities have been cured or waived. Unless waived,
any defects or irregularities must be cured within the time period determined by
the Company. None of the Company, the Book-Entry Transfer Facilities, the
Depositary, the Information Agent or any other person will be under any duty to
notify a tendering stockholder of any defect or irregularity nor will these
individuals or entities incur any liability for failing to give any that
notification.
4. WITHDRAWAL RIGHTS. A tendering stockholder may withdraw any tendered
Shares at any time prior to the Expiration Date. Thereafter, tenders are
irrevocable, except that they may be withdrawn after 12:00 Midnight, New York
City time, on July 3, 1995 unless accepted for purchase by the Company. If the
Company extends the period of time during which the Offer is open, is delayed in
accepting for purchase or paying for Shares or is unable to accept for purchase
or pay for Shares pursuant to the Offer for any reason, then, without prejudice
to the Company's rights under the Offer, the Depositary may, on behalf of the
Company, retain all Shares tendered, and these Shares may not be withdrawn
except as otherwise provided in this Section 4, except that the Company must
either pay the consideration offered, or return the tendered securities,
promptly after the termination or withdrawal of the Offer.
10
<PAGE> 11
To be effective, a written, telegraphic or facsimile transmission notice of
withdrawal must be timely received by the Depositary at one of its addresses set
forth on the back cover of this Offer to Purchase specifying the name of the
person tendering the Shares to be withdrawn and the number of Shares to be
withdrawn. If the Shares to be withdrawn have been delivered to the Depositary,
a signed notice of withdrawal with signatures guaranteed by an Eligible
Institution (except in the case of Shares tendered by an Eligible Institution)
must be submitted prior to the release of these Shares. The notice must also
specify, in the case of Shares tendered by delivery of certificates, the name of
the registered holder (if different from that of the tendering stockholder) and
the serial numbers shown on the particular certificates evidencing the Shares to
be withdrawn. Withdrawals may not be rescinded and Shares withdrawn will
thereafter be deemed not validly tendered for purposes of the Offer; provided
that withdrawn Shares may be retendered by following the procedures described in
Section 3 at any time prior to the Expiration Date.
The Company, in its sole discretion, will resolve all questions as to the
form and validity (including time of receipt) of any withdrawal notice. All
determinations will be final and binding. None of the Company, the Depositary,
the Information Agent or any other person will be under any duty to notify the
individual withdrawing the Shares of any defect or irregularity in any notice of
withdrawal nor will any of these individuals or persons incur any liability for
failure to give any notification.
5. ACCEPTANCE FOR PURCHASE OF SHARES AND PAYMENT OF PURCHASE PRICE. Upon
the terms and subject to the conditions of the Offer, and as promptly as
practicable after the Expiration Date, the Company will (subject to the
proration and "odd lot" provisions of the Offer) accept for purchase and thereby
purchase Shares validly tendered and not withdrawn. In all cases, payment for
Shares accepted pursuant to the Offer will be made promptly (subject to possible
delay in the event of proration) but only after timely receipt by the Depositary
of certificates for Shares (or a confirmation of a book-entry transfer of Shares
into the Depositary's account at one of the Book-Entry Transfer Facilities), a
properly completed and duly executed Letter of Transmittal (or facsimile
thereof) and any other required documents.
Upon the terms and subject to the conditions of the Offer, the Company will
purchase ten million Shares (subject to increase or decrease as provided in
Section 1 and Section 14) at the Purchase Price or such lesser number of Shares
as are properly tendered (and not withdrawn as permitted in Section 4) at the
Purchase Price, as promptly as practicable after the Expiration Date.
If the Company is required to make pro rata purchases, the Company will
determine the proration factor and pay for those tendered Shares accepted for
purchase as promptly as practicable after the Expiration Date. The Company,
however, does not expect to be able to announce the final results of any
proration until the expiration of approximately seven trading days after the
Expiration Date.
For purposes of the Offer, the Company will be deemed to have accepted for
purchase (and thereby purchase), subject to the proration and "odd lot"
provisions of the Offer, Shares that are validly tendered and not withdrawn as,
if and when it gives oral or written notice to the Depositary of its acceptance
for purchase of the Shares. Payment will be made by depositing the aggregate
Purchase Price with the Depositary as agent for all tendering stockholders for
the purpose of receiving payment from the Company and transmitting payment to
tendering stockholders. Under no circumstances will interest be paid on amounts
to be paid to tendering stockholders by the Company by reason of any delay in
making payment.
Certificates for all Shares not purchased will be returned or, in the case
of Shares tendered by book-entry transfer, credited to an account maintained
with a Book-Entry Transfer Facility, as soon as practicable without expense to
the tendering stockholder. The Company will pay all stock transfer taxes, if
any, payable on the transfer of Shares purchased pursuant to the Offer, except
as set forth in Instruction 7 of the Letter of Transmittal. Payment may be
delayed if the Company encounters difficulty in determining the number of Shares
validly tendered or if proration is required. In addition, if certain events
occur, the Company may not be obligated to purchase Shares pursuant to the
Offer. See Section 6. The Company will pay the same amount per Share for each
Share accepted pursuant to the Offer.
11
<PAGE> 12
6. CERTAIN CONDITIONS OF THE OFFER. Notwithstanding any other provision of
the Offer, the Company will not be required to accept or pay for any Shares
tendered, and may terminate or amend the Offer or may postpone (subject to the
requirements of the Exchange Act for prompt payment for or return of Shares) the
acceptance or payment for Shares tendered, if prior to acceptance and on or
after May 2, 1995 any of the following shall have occurred (or shall be
determined in the sole judgment of the Company to have occurred) which in the
Company's sole judgment and regardless of the circumstances (including any
action or omission to act by the Company) makes it inadvisable to proceed with
the Offer or with acceptance or payment:
(i) there shall have been threatened, instituted or pending any action
or proceeding by any government or governmental, regulatory or
administrative agency, authority or tribunal or any other person, domestic
or foreign, before any court, authority, agency or tribunal which directly
or indirectly: (a) challenges the making of the Offer, the acquisition of
some or all of the Shares pursuant to the Offer or otherwise relates in any
manner to the Offer; or (b) in the Company's sole judgment, could
materially and adversely affect the business, condition (financial or
other), income, operations or prospects of the Company and its
subsidiaries, taken as a whole, or materially impair the contemplated
benefits of the Offer to the Company or its stockholders;
(ii) there shall have been any action threatened, pending or taken, or
approval withheld, or any statute, rule, regulation, judgment, order or
injunction threatened, proposed, sought, promulgated, enacted, entered,
amended, enforced or deemed to be applicable to the Offer or the Company or
any of its subsidiaries, by any court or any authority, agency or tribunal
which, in the Company's sole judgement, would or might directly or
indirectly: (a) make the acceptance for purchase of or payment for some or
all of the Shares illegal or otherwise restrict or prohibit consummation of
the Offer; (b) delay or restrict the Company, or render the Company unable,
to accept for purchase or pay for some or all of the Shares; (c) materially
impair the contemplated benefits of the Offer to the Company; or (d)
materially and adversely affect the business, condition (financial or
other), income, operations or prospects of the Company and its
subsidiaries, taken as a whole;
(iii) there shall have occurred: (a) any general suspension of trading
in, or limitation on prices for, securities on any national securities
exchange or in the over-the-counter market; (b) the declaration of a
banking moratorium or any suspension of payments in respect of banks in the
United States; (c) the commencement of a war, armed hostilities or other
international or national calamity directly or indirectly involving the
United States; (d) any limitation (whether or not mandatory) by any
governmental, regulatory or administrative agency or authority on, or any
event which, in the Company's sole judgment, might affect, the extension of
credit by banks or other lending institutions in the United States; (e) any
significant decrease in the market price of the Shares or any change in the
general political, market, economic or financial conditions in the United
States or abroad that could, in the sole judgment of the Company, have a
material adverse effect on the Company's business, operations or prospects
or the trading in the Shares; or (f) in the case of any of the foregoing
existing at the time of the commencement of the Offer, a material
acceleration or worsening thereof;
(iv) the Company shall have entered into a definitive agreement or an
agreement in principle with any person with respect to a merger, business
combination or acquisition proposal, disposition of assets other than in
the ordinary course of business or any tender or exchange offer with
respect to some or all of the Shares (other than this Offer) shall have
been commenced;
(v) any change shall occur or be threatened in the business, condition
(financial or other), income, operations, Share ownership or prospects of
the Company and its subsidiaries, taken as a whole, which, in the sole
judgment of the Company, is or may be material to the Company or its
subsidiaries; or
(vi) any person, entity or "group" (as that term is used in Section
13(d)(3) of the Exchange Act) shall have: (a) acquired, or proposed to
acquire, beneficial ownership of more than 5% of the outstanding Shares
(other than a person, entity or group which had publicly disclosed
ownership in a Schedule 13D or 13G (or an amendment thereto) on file with
the Securities and Exchange Commission (the "Commission") prior to May 2,
1995); (b) filed with the Commission on or before May 2, 1995 a Schedule
13G or a Schedule 13D with respect to the Shares shall have acquired, or
proposed to acquire, beneficial
12
<PAGE> 13
ownership of additional Shares constituting more than 2% of the outstanding
Shares; (c) formed a new group which beneficially owns more than 5% of the
outstanding Shares (options for and other rights to acquire Shares which
are acquired or proposed to be acquired being deemed for purposes of this
clause (vi) to be immediately exercisable); or (d) filed a Notification and
Report Form under the Hart-Scott-Rodino Antitrust Improvements Act of 1976
or made a public announcement reflecting intent to acquire the Company or
any of its subsidiaries or any of their respective assets or securities.
The foregoing conditions are for the sole benefit of the Company and may be
asserted by the Company regardless of the circumstances (including any action or
inaction by the Company) giving rise to any condition. Any condition may be
waived by the Company, in whole or in part, at any time and from time to time in
its sole discretion. The Company's failure to exercise any of the foregoing
rights will not be deemed a waiver of any right; and the waiver of any right
with respect to particular facts and circumstances will not be deemed a waiver
with respect to any other facts or circumstances. Any determination by the
Company concerning the events described above will be final and binding on all
parties.
7. PRICE OF SHARES. The Shares are included for quotation on the NNM. The
following table sets forth the high and low closing prices of the Shares as
reported on the NNM for the fiscal periods indicated:
<TABLE>
<CAPTION>
FISCAL QUARTER HIGH LOW
-------------------------------------------- ------ ------
<S> <C> <C> <C>
1993:
First....................................... $ 1.50 $ 0.88
Second...................................... $ 1.44 $ 1.00
Third....................................... $ 1.48 $ 0.88
Fourth...................................... $ 1.31 $ 0.88
1994:
First....................................... $ 1.31 $ 1.06
Second...................................... $ 1.66 $ 1.13
Third....................................... $ 1.50 $ 1.22
Fourth...................................... $ 1.44 $ 1.13
1995:
First....................................... $ 1.41 $ 1.13
</TABLE>
On May 4, 1995, the last full day of trading prior to the announcement of
the Offer, the closing price of the Shares as reported on the NNM was $1.31 per
Share. Stockholders are urged to obtain a current market quote for the Shares.
The Company has not paid cash dividends during the past two years. To the
extent the Company receives tenders for less than ten million Shares, the Board
will consider paying a cash distribution to stockholders or instituting an open
market repurchase program to be funded from the remaining Distributable Cash.
8. CERTAIN EFFECTS OF THE OFFER. As of May 2, 1995, the Company had issued
and outstanding 19,263,596 shares of common stock. Assuming a purchase of ten
million Shares at the Purchase Price, the Company will purchase approximately
52% of its shares of outstanding common stock. The Company does not believe that
the purchase of Shares pursuant to the Offer will result in delisting of the
Shares on the NNM or termination of registration of the Shares under the
Exchange Act.
The Shares are currently "margin securities" under the rules of the Federal
Reserve Board. This has the effect, among other things, of allowing brokers to
extend credit on the collateral of the Shares. The Company believes that,
following the repurchase of Shares pursuant to the Offer, the Shares will
continue to be margin securities for purposes of the Federal Reserve Board's
margin regulations. The Shares purchased pursuant to the Offer will return to
the status of authorized and unissued shares and be held by the Company as
treasury shares.
The Company has been informed that Dickstein & Co., L.P. and Dickstein
International Limited (collectively, the "Dickstein Entities"), currently intend
to tender all of their Shares based on current market
13
<PAGE> 14
prices. Messrs. David J. Brail and Alan S. Cooper, directors of the Company, are
also Vice Presidents of Dickstein Partners, Inc., the entity which manages the
Dickstein Entities. As of May 2, 1995, the Dickstein Entities were the
beneficial owners of 1,466,700 Shares or 7.61% of the shares of the Company's
common stock issued and outstanding. Pursuant to Section 2(e) of an agreement
entered into between the Company and the Dickstein Entities on May 17, 1993 (the
"Agreement"), if the Dickstein Entities own less than an aggregate of 859,575
but in excess of 573,050 shares of the Company's common stock for a period of
thirty consecutive days, then Mr. Brail or Mr. Cooper (collectively the
"Dickstein Nominees" individually a "Dickstein Nominee") is required to
immediately resign from the Board. If the Dickstein Entities own less than an
aggregate of 573,050 shares of the Company's common stock for a period of thirty
consecutive days, then the remaining Dickstein Nominee is required to resign
immediately. Accordingly, if the Dickstein Entities tender Shares pursuant to
the Offer, Messrs. Brail and Cooper may be required to resign pursuant to the
Agreement. The Agreement was filed as an exhibit to the Company's Current Report
on Form 8-K dated May 17, 1993 and is hereby incorporated by reference.
The directors and executive officers of the Company currently own, in the
aggregate, less than one percent of the outstanding shares of the Company's
Common Stock. Assuming the Company purchases ten million Shares at the Purchase
Price, and assuming no director or executive officer sells any Shares pursuant
to the Offer or otherwise, the directors and executive officers of the Company
would still own, in the aggregate, less than one percent of the outstanding
shares of the Company's common stock. The Company has been informed that except
for tenders which may be made by the Dickstein Entities, none of the other
directors or executive officers of the Company intend to tender any Shares
pursuant to the Offer. None of the stock options owned by the directors are
exercisable currently.
NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO
ANY STOCKHOLDER AS TO WHETHER TO TENDER ALL OR ANY SHARES. THE COMPANY HAS BEEN
INFORMED THAT THE DICKSTEIN ENTITIES INTEND TO TENDER SHARES PURSUANT TO THE
OFFER AS SET FORTH ABOVE. EACH STOCKHOLDER MUST MAKE HIS OR HER OWN DECISION
WHETHER TO TENDER SHARES AND, IF SO, THE NUMBER OF SHARES TO TENDER. THERE CAN
BE NO ASSURANCE THAT DISTRIBUTIONS FROM THE SALE OF THE PROPERTIES WILL BEAR ANY
RELATIONSHIP TO THE DISTRIBUTIONS PROJECTED HEREIN OR THAT THE PROJECTED
DISTRIBUTIONS WOULD BE MADE WITHIN THE TIMEFRAMES DESCRIBED ABOVE. ACTUAL SALES
PRICES FOR THE PROPERTIES MAY BE MATERIALLY LOWER THAN CARRYING VALUES AS OF
DECEMBER 31, 1994 AND, THEREFORE, DISTRIBUTIONS FOLLOWING SALES OF THE
PROPERTIES MAY BE MATERIALLY LESS THAN AS PROJECTED ABOVE.
9. SOURCE AND AMOUNT OF FUNDS. The Company will utilize the Distributable
Cash to pay for the Shares accepted for purchase pursuant to the Offer.
10. CERTAIN INFORMATION CONCERNING THE COMPANY. The Company was
incorporated in Delaware in 1987. The Company maintains its principal executive
offices at 150 South Wacker Drive, Suite 2900, Chicago, Illinois 60606,
telephone (312) 683-3670.
Summary Historical Financial Information. Set forth below is certain
consolidated historical financial information of the Company and its
subsidiaries. The historical financial information for the years ended December
31, 1993 and December 31, 1994 is derived from the audited consolidated
financial statements incorporated by reference from the Company's Annual Report
to Stockholders for the year ended December 31, 1994. This information should be
read in conjunction with, and is qualified in its entirety by reference to, the
audited consolidated financial statements and their related notes.
14
<PAGE> 15
SUMMARY HISTORICAL FINANCIAL INFORMATION
SUMMARY CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1994 AND 1993
<TABLE>
<CAPTION>
DECEMBER 31, 1994 DECEMBER 31, 1993
----------------- -----------------
<S> <C> <C>
ASSETS
Cash and Cash Equivalents................................ $ 290,366 $ 2,013,948
Interest Receivable...................................... 26,357 70,155
Loans Receivable......................................... 801,000 956,563
Mortgage Loans In Substantive Foreclosure................ -- 7,316,418
Foreclosed Real Estate Held For Sale, Net................ 37,809,395 13,841,549
Investment in Real Estate................................ -- 42,740,410
Note Receivable.......................................... -- 265,000
Investment in Real Estate Venture........................ 7,093,058 9,694,964
Other Assets............................................. 476,898 323,827
----------------- -----------------
Total Assets..................................... $ 46,497,074 $ 77,222,834
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts Payable and Accrued Expenses.................... $ 1,582,780 $ 1,452,375
Due to Affiliates........................................ 730,229 1,848,416
----------------- -----------------
Total Liabilities................................ 2,313,009 3,300,791
----------------- -----------------
Shares of Common Stock, $0.01 Par Value, 50,000,000
Shares Authorized, 19,263,596 Shares Issued........... 170,946,739 170,927,133
Accumulated Deficit...................................... (126,735,037) (96,977,453)
Treasury Stock at Cost, 20,100 Shares.................... (27,637) (27,637)
----------------- -----------------
Total Stockholders' Equity....................... 44,184,065 73,922,043
----------------- -----------------
Total Liabilities and Stockholders' Equity....... $ 46,497,074 $ 77,222,834
============= =============
Book Value Per Share of Common Stock (19,263,596 and
19,246,168 Shares Outstanding for 1994 and 1993,
respectively)............................................ $ 2.29 $ 3.84
============= =============
</TABLE>
15
<PAGE> 16
SUMMARY CONSOLIDATED STATEMENTS OF INCOME AND EXPENSES
DECEMBER 31, 1994 AND 1993
<TABLE>
<CAPTION>
DECEMBER 31, 1994 DECEMBER 31, 1993
----------------- -----------------
<S> <C> <C>
TOTAL INCOME................................................. $ 104,451 $ 235,063
----------------- -----------------
EXPENSES
Provision for Losses on Loans, Notes and Interest
Receivable.............................................. 260,372 1,876,574
Interest on Advances from Affiliates....................... 304,022 9,377
Real Estate Taxes.......................................... -- 9,407
Loss (Gain) on Disposition of Properties, Note Receivable
and Foreclosed Real Estate Held......................... 537,179 (318,201)
Net Loss from Operations of Foreclosed Real Estate Held for
Sale.................................................... 2,901,151 --
Loss from Operations of Real Estate Venture................ 2,824,379 1,604,355
Provision for Loss on Foreclosed Real Estate Held for
Sale.................................................... 20,899,566 1,514,503
Other Expenses............................................. 2,135,366 1,968,884
----------------- -----------------
Total Expenses............................................... 29,862,035 6,664,899
----------------- -----------------
Operating Loss............................................... (29,757,584) (6,429,836)
Minority Interest in Consolidated Partnership.............. -- 192,603
----------------- -----------------
Net Loss..................................................... $ (29,757,584) $(6,237,233)
============= =============
Net Loss Per Share of Common Stock (Based on the Weighted
Average Number of Shares Outstanding of 19,257,962 and
19,246,168, respectively)(1)............................... $ (1.55) $ (0.32)
============= =============
</TABLE>
- ---------------
(1) Weighted Average Number of Shares Outstanding reflects the issuance of
shares pursuant to employment contracts during 1994.
PRO FORMA FINANCIAL INFORMATION
The following unaudited pro forma financial information reflects the
receipt of $21.5 million from the disposition of foreclosed real estate held for
sale in March, 1995 and assumes the Company: (i) utilizes $17.25 million to
repurchase ten million Shares of its Common Stock, pursuant to the Offer at a
price of $1.70 per Share, including fees and expenses of $250,000; and (ii)
utilizes $4.25 million to purchase short-term U.S. Government obligations
interest at a rate of 4.5% which will be utilized as working capital for the
Company. The pro forma adjustments assume that the transaction occurred, for the
purposes of the pro forma consolidated statement of income and expenses as of
the first day of the period presented, and for purposes of the pro forma
consolidated balance sheet, as of its date. The pro forma financial information
should be read in conjunction with the historical consolidated financial
information and does not purport to be indicative of the results which may be
obtained in the future or which would actually have been obtained had the offer
occurs as of the dates indicated.
16
<PAGE> 17
SUMMARY UNAUDITED PRO FORMA FINANCIAL INFORMATION
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1994
<TABLE>
<CAPTION>
HISTORICAL PRO FORMA
------------- -------------
<S> <C> <C>
ASSETS
Cash and Cash Equivalents..................................... $ 290,366 $ 4,540,366
Interest Receivable........................................... 26,357 26,357
Loans Receivable.............................................. 801,000 801,000
Foreclosed Real Estate Held For Sale, Net..................... 37,809,395 16,309,395
Investment in Real Estate Venture............................. 7,093,058 7,093,058
Other Assets.................................................. 476,898 476,898
------------- -------------
Total Assets.................................................... $ 46,497,074 $ 29,247,074
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts Payable and Accrued Expenses......................... $ 1,582,780 $ 1,582,780
Due to Affiliates............................................. 730,229 730,229
------------- -------------
Total Liabilities............................................... 2,313,009 2,313,009
------------- -------------
Shares of Common Stock, $0.01 Par Value, 50,000,000 Shares
Authorized, 19,263,596 Shares Issued....................... 170,946,739 170,946,739
Accumulated Deficit........................................... (126,735,037) (126,735,037)
Treasury Stock at Cost, 20,100 and 10,020,100 Shares,
Respectively............................................... (27,637) (17,277,637)
------------- -------------
Total Stockholders' Equity...................................... 44,184,065 26,934,065
------------- -------------
Total Liabilities and Stockholders' Equity...................... $ 46,497,074 $ 29,247,074
============ ============
Book Value Per Share of Common Stock (19,263,596 and 9,263,596
Shares Outstanding, respectively)............................. $ 2.29 2.91
============ ============
</TABLE>
17
<PAGE> 18
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF INCOME AND EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 1994
<TABLE>
<CAPTION>
HISTORICAL PRO FORMA
------------ ------------
<S> <C> <C>
TOTAL INCOME.................................................... $ 104,451 $ 295,701
------------ ------------
Provision for Losses on Loans, Notes and Interest
Receivable................................................. 260,372 260,372
Interest on Advances from Affiliates.......................... 304,022 304,022
Loss (Gain) on Disposition of Properties, Note Receivable and
Foreclosed Real Estate Held for Sale....................... 537,179 537,179
Net Loss from Operations of Foreclosed Real Estate Held for
Sale....................................................... 2,901,151 2,901,151
Loss from Operations of Real Estate Venture................... 2,824,379 2,824,379
Provision for Loss on Foreclosed Real Estate Held for Sale.... 20,899,566 20,899,566
Other Expenses................................................ 2,135,366 2,135,366
------------ ------------
Total Expenses................................................ 29,862,035 29,862,035
------------ ------------
Net Loss........................................................ $(29,757,584) $(29,566,334)
=========== ===========
Net Loss Per Share of Common Stock (Based on the Weighted
Average Number of Shares Outstanding of 19,257,962 and
9,257,962, respectively)(1)................................... $ (1.55) $ (3.19)
=========== ===========
</TABLE>
- ---------------
(1) Weighted Average Number of Shares Outstanding reflects the issuance of
shares pursuant to employment contracts during 1994.
NOTES TO SUMMARY UNAUDITED PRO FORMA FINANCIAL INFORMATION
The summary unaudited pro forma condensed consolidated statement of income
and expenses are based on the historical financial statements of the Company and
assume the transactions had taken place as of January 1 of the period presented.
The pro forma condensed consolidated balance sheet assumes the transactions had
taken place as of December 31, 1994. The pro forma amounts are based on certain
assumptions and estimates and, therefore, do not purport to be indicative of
results that actually would have been achieved if the transactions had been
completed as of those dates or indicative of future results of operations and
financial conditions.
Plans and Proposals. Except as disclosed in this Offer to Purchase, the
Company has no other agreements or understandings as to either divestitures or
acquisitions that would be material to the Company and does not have any plans
or proposals which relate to or would result in: (i) the acquisition by any
person of additional securities of the Company or the disposition of securities
of the Company; (ii) an extraordinary corporate transaction, such as a merger,
reorganization or liquidation involving the Company or any of its subsidiaries;
(iii) a sale or transfer of a material amount of assets of the Company or any of
its subsidiaries; (iv) any change in the present Board or management of the
Company except as described in Section 8; (v) except as described under
"Background," any material change in the present dividend rate or policy,
indebtedness or capitalization of the Company; (vi) any other material change in
the Company's corporate structure or business; (vii) any change in the Company's
amended Certificate of Incorporation or Bylaws or any actions which may impede
the acquisition of control of the Company by any person; (viii) a class of
equity security of the Company being terminated from quotation on the NNM; (ix)
a class of equity security of the Company becoming eligible for termination of
registration pursuant to Section 12(g)(4) of the Exchange Act; or (x) the
suspension of the Company's obligation to file reports pursuant to Section 15(d)
of the Exchange Act.
Additional Information About the Company. The Company's Annual Report on
Form 10-KSB for the year ended December 31, 1994 has been filed with the
Commission. Copies of this document may be obtained from Banyan Strategic Land
Fund II, 150 South Wacker Drive, Suite 2900, Chicago, Illinois 60606, telephone
(312) 683-3670.
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<PAGE> 19
The Company is subject to the informational filing requirements of the
Exchange Act and in accordance therewith is obligated to file reports and other
information with the commission relating to its business, financial statements
and other matters. Certain information as of particular dates, concerning the
Company's directors and officers, their remuneration, options granted to them,
the principal holders of the Company's securities and any material interest of
these persons in transactions with the Company is filed with the Commission.
These reports, as well as such other material, may be inspected and copies
obtained at prescribed rates at the Commission's public reference facilities at
Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549; 7 World Trade Center,
13th Floor, New York, New York 10048; Suite 500 East, Tishman Building, 5757
Wilshire Boulevard, Los Angeles, California 90036-3648; and 500 West Madison
Avenue, Suite 1400, Chicago, Illinois 60661. The Company has also filed with the
Commission a statement on Schedule 13E4 that contains additional information
with respect to the Offer. This Schedule and certain amendments thereto may be
examined and copies may be obtained at the same places and in the same manner as
set forth above (except that the Schedule may not be available in the regional
offices of the Commission).
11. TRANSACTIONS AND AGREEMENTS CONCERNING THE SHARES. Neither the Company
nor, to its knowledge, any of its subsidiaries, executive officers or directors
or any associate of any officer or director has engaged in any transactions
involving the Shares during the forty business days preceding the date hereof.
Except as described in Section 8, neither the Company nor, to its knowledge, any
of its executive officers or directors is a party to any contract, arrangement,
understanding or relationship relating directly or indirectly to the Offer with
any other person with respect to the Shares.
12. REGULATORY APPROVALS. The Company is not aware of any other approval
or other action by any government or governmental, administrative or regulatory
authority or agency, domestic or foreign, that would be required for the
Company's acquisition or ownership of Shares as contemplated by the Offer or of
any license or regulatory permit that appears to be material to its business
that might be adversely affected by its acquisition of Shares as contemplated in
the Offer. The Company will seek approval or take other action if necessary. The
Company cannot predict whether it may determine that it is required to delay the
acceptance of, or payment for, Shares tendered pursuant to the Offer pending the
outcome of any such matter. There can be no assurance that any such approval or
other action, if needed, would be obtained or would be obtained without
substantial conditions or that the failure to obtain any such approval or other
action might not result in adverse consequences to the Company. The Company's
obligations under the Offer to accept for payment and pay for Shares are subject
to certain conditions. See Section 6.
13. CERTAIN FEDERAL INCOME TAX CONSEQUENCES. The following summary is a
general discussion of certain of the United States federal income tax
consequences of the Offer.
This summary is based upon the Internal Revenue Code of 1986, as amended
through the date hereof (the "Code") and existing final, temporary and proposed
Treasury Regulations, Revenue Rulings, administrative pronouncements, and
judicial decisions, all of which are subject to prospective and retroactive
changes and interpretations. No ruling as to any matter discussed in this
summary has been requested or received from the Internal Revenue Service (the
"IRS") and the Company does not intend to request or receive any such ruling.
In General. A stockholder's sale of Shares for cash pursuant to the Offer
will be a taxable transaction for federal income tax purposes, and may also be a
taxable transaction under applicable state, local, foreign or other tax laws.
This summary does not discuss any aspects of state, local, foreign or other tax
laws. Certain stockholders (including insurance companies, tax-exempt
organizations, financial institutions, broker dealers and stockholders who have
acquired their Shares upon the exercise of options or otherwise as compensation)
may be subject to special rules not discussed below. For purposes of this
discussion, stockholders are assumed to hold their Shares as "capital assets"
(within the meaning of Section 1221 of the Code).
Treatment as a Sale or Exchange. Under Section 302 of the Code, a
redemption of Shares by the Company pursuant to the Offer will, as a general
rule, be treated as a distribution in part or full payment in exchange for the
Shares (rather than as a distribution by the Company with respect to the Shares
held by the tendering stockholder) for federal income tax purposes if the
redemption is: (i) "substantially disproportionate" with respect to the
stockholder; (ii) in "complete redemption" of the stockholder's interest in the
19
<PAGE> 20
Company; or (iii) "not essentially equivalent to a dividend" with respect to the
stockholder. These tests (the "Section 302 tests") are discussed more fully
below. Notwithstanding the foregoing, the rules applicable to "collapsible
corporations" might, if they applied, cause a stockholder's gain to be ordinary
income (rather than capital gain). Due to its long operating history, the nature
of its assets and other factors, the Company believes it is not a "collapsible
corporation."
If any of the Section 302 tests is satisfied, a tendering stockholder will
recognize capital gain or loss equal to the difference between the amount of
cash received by the stockholder pursuant to the Offer and the stockholder's tax
basis in the Shares sold pursuant to the Offer. If the Shares have been held for
more than one year, the gain or loss will be long-term capital gain or loss.
Therefore, a tendering stockholder may wish to take the various tax bases and
holding periods of his Shares, if such characteristics are not uniform, into
account in determining which Shares to tender.
Constructive Ownership of Stock. In determining whether any of the Section
302 tests is satisfied, a stockholder must take into account not only Shares
actually owned by the stockholder, but also Shares that are considered as being
owned by the stockholder ("constructive ownership") pursuant to Section 318 of
the Code. Under Section 318, a stockholder is deemed to own Shares actually
owned, and in some cases, Shares constructively owned, by certain related
individuals and entities in which the stockholder has an interest, or in the
case of stockholders that are entities, by certain individuals or entities that
have an interest in the stockholder, as well as any Shares the stockholder has a
right to acquire by exercise of an option or by the conversion or exchange or a
security.
The Section 302 Tests. One of the following tests must be satisfied in
order for the redemption of Shares pursuant to the Offer to be treated as a
distribution in part or full payment in exchange for Shares:
(i) Substantially Disproportionate Test. The receipt of cash by a
stockholder will be substantially disproportionate with respect to the
stockholder if the percentage of the outstanding voting stock of the Company
actually and constructively owned by the stockholder immediately following the
exchange of Shares pursuant to the Offer (treating Shares exchanged pursuant to
the Offers as not outstanding) is less than 80% of the percentage of the
outstanding voting stock of the Company actually and constructively owned by the
stockholder immediately before the exchange (treating Shares exchanged pursuant
to the Offer as outstanding). Stockholders should consult their tax advisors
with respect to the application of the "substantially disproportionate" test to
their particular facts and circumstances.
(ii) Complete Redemption Test. The receipt of cash by a stockholder will
be in complete redemption of the stockholder's interest if either: (a) all of
the stock of the Company that is actually and constructively owned by the
stockholder is sold pursuant to the Offer; or (b) all of the stock of the
Company actually owned by the stockholder is sold pursuant to the Offer and the
stockholder is eligible to waive, and effectively waives, the attribution of
stock of the Company constructively owned by the stockholder in accordance with
the procedures described in Section 302(c) of the Code. Stockholders considering
making this election should consult their tax advisors.
(iii) Not Essentially Equivalent to a Dividend Test. Even if the receipt
of cash by a stockholder fails to satisfy the "substantially disproportionate"
test or the "complete redemption" test, the stockholder may nonetheless be able
to satisfy the "not essentially equivalent to a dividend" test. The receipt of
cash by a stockholder will be "not essentially equivalent to a dividend" if the
stockholder's exchange of Shares pursuant to the Offer results in a "meaningful
reduction" of the stockholder's proportionate interest in the Company. The
determination of whether the receipt of cash by a stockholder will result in a
meaningful reduction of the stockholder's proportionate interest will depend on
the stockholder's particular facts and circumstances. However, in the case of a
small minority stockholder, even a small reduction may satisfy this test where
payments will not be pro rata with respect to all outstanding Shares.
Stockholders expecting to rely upon the "not essentially equivalent to a
dividend" test should consult their tax advisors as to its application to their
particular situations.
Although the issue is not free from doubt, it may be possible for a
tendering stockholder to satisfy one of the above three tests by
contemporaneously selling or otherwise disposing of all or some of the Shares
that are
20
<PAGE> 21
actually owned (or by causing another to sell or otherwise dispose of all or
some of the Shares that are constructively owned) by the stockholder but are not
purchased pursuant to the Offer. Correspondingly, a tendering stockholder may
not be able to satisfy one of the above three tests because of contemporaneous
acquisitions of Shares by the stockholder or by some person or entity whose
Shares would be treated as constructively owned by the stockholder. Stockholders
should consult their tax advisors regarding the tax consequences of sales or
acquisitions in their particular circumstances.
If the Offer is oversubscribed, the Company's purchase of Shares pursuant
to the Offer will be prorated. Thus, even if all the Shares actually and
constructively owned by a stockholder are tendered pursuant to the Offer, not
all of the Shares may purchased by the Company, which in turn may affect the
stockholder's ability to satisfy one or more of the Section 302 tests.
Treatment as a Dividend. The Company has no current or accumulated
earnings and profits and does not anticipate having any earnings and profits
during the current fiscal year. A tendering stockholder, therefore, should not
be treated as receiving a dividend (taxable as ordinary income) as a result of
tendering Shares. If none of the Section 302 tests is satisfied, then a
tendering stockholder will be treated as receiving a distribution from the
Company which distribution shall be first applied against and reduce the
adjusted basis of the Shares tendered and the remainder, if any, shall be
treated as capital gain.
Backup Withholding. See Section 3 concerning the potential application of
federal backup withholding.
Foreign Stockholders. The redemption is not a dividend as to foreign
stockholders and the Company will not withhold federal income tax from cash
payments made pursuant to the Offer. Foreign stockholders are urged to consult
their tax advisors regarding the application of federal income tax and/or
withholding requirements.
THE TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL INFORMATION
ONLY. THE TAX CONSEQUENCES OF A SALE PURSUANT TO THE OFFER MAY VARY DEPENDING
UPON, AMONG OTHER THINGS, THE PARTICULAR CIRCUMSTANCES OF THE TENDERING
STOCKHOLDER. NO INFORMATION IS PROVIDED HEREIN AS TO THE STATE, LOCAL OR FOREIGN
TAX CONSEQUENCES OF THE TRANSACTION CONTEMPLATED BY THE OFFER. STOCKHOLDERS ARE
URGED TO CONSULT THEIR TAX ADVISORS TO DETERMINE THE PARTICULAR FEDERAL, STATE,
LOCAL AND FOREIGN TAX CONSEQUENCES OF SALES MADE BY THEM PURSUANT TO THE OFFER
AND THE EFFECT OF THE CONSTRUCTIVE STOCK OWNERSHIP RULES MENTIONED ABOVE.
14. EXTENSION OF TENDER PERIOD; TERMINATION; AMENDMENTS. The Company
expressly reserves the right, in its sole discretion, at any time or from time
to time, to extend the period of time during which the Offer is open by giving
oral or written notice of extension to the Depositary. During any extension, all
Shares previously tendered and not purchased or withdrawn will remain subject to
the Offer, except to the extent that Shares may be withdrawn as set forth in
Section 4. The Company also expressly reserves the right, in its sole
discretion, to terminate the Offer and not accept for purchase or pay for any
Shares not theretofore accepted for purchase or paid for or, subject to
applicable law, to postpone paying for Shares upon the occurrence of any of the
conditions specified in Section 6 hereof by giving oral or written notice of
termination or postponement to the Depositary and making a public announcement
thereof. The Company's right to delay payment for Shares which it has accepted
for purchase is limited by Rule 13e-4(f)(5) promulgated under the Exchange Act
which requires the Company to either pay the consideration offered or return the
Shares tendered promptly after termination or withdrawal of a tender offer.
Subject to compliance with applicable law, the Company further reserves the
right, in its sole discretion, to amend the Offer in any respect. Amendments to
the Offer may be made at any time or from time to time effected by public
announcement thereof to be issued no later than 9:00 a.m., New York City time,
on the next business day after the previously scheduled Expiration Date. Any
public announcement made pursuant to the Offer will be disseminated promptly to
stockholders in a manner reasonably designed to inform stockholders of the
change. Without limiting the manner in which the Company may choose to make a
public announcement, except as required by applicable law, the Company will have
no obligation to publish, advertise or otherwise communicate any public
announcement other than by making a release to the Dow Jones News Service.
21
<PAGE> 22
If the Company materially changes the terms of the Offer or the information
concerning the Offer, the Company will extend the Offer to the extent required
by Rules 13e-4(d)(2) and 13e-4(e)(2) promulgated under the Exchange Act. These
rules set forth the minimum period during which an offer must remain open
following material changes in the terms or information concerning the offer. The
materiality of the change depends on the facts and circumstances, including the
relative materiality of the terms or information. If: (i) the Company increases
or decreases the consideration offered for Shares pursuant to the Offer or the
Company increases the number of Shares being sought by an amount exceeding 2% of
the outstanding Shares, or the Company decreases the number of Shares being
sought; and (ii) the Offer is scheduled to expire at any time earlier than the
expiration of a period ending on the tenth business day from, and including, the
date that notice of increase or decrease is first published, sent or given, the
Offer will be extended until the expiration of a period of ten business days.
15. FEES. Other than as described below, no fees will be paid to brokers,
dealers or others by the Company in connection with the Offer.
Depositary and Information Agent. The Company has retained Georgeson &
Company Inc. to act as Information Agent and the First Chicago Trust Company of
New York to act as Depositary. The Information Agent may contact stockholders by
mail, telephone, telex, telegraph and personal interviews and may request
brokers, dealers and other nominee stockholders to forward materials relating to
the Offer to beneficial owners. The Information Agent and the Depositary will
each receive reasonable and customary compensation for their respective
services, will be reimbursed for certain reasonable out-of-pocket expenses and
will be indemnified against certain liabilities and expenses in connection with
the Offer, including liabilities under the federal securities laws. The
Depositary has also rendered transfer services to the Company in the past for
which is has received customary compensation, and can be expected to render
similar services to the Company in the future. The Information Agent may render
information services to the Company in the future. Neither the Depositary nor
the Information Agent has been retained to, or is authorized to, make
recommendations in connection with the Offer.
Brokers, dealers, commercial banks and trust companies will, upon request,
be reimbursed by the Company for reasonable and necessary costs and expenses
incurred by them in forwarding materials to their customers.
16. MISCELLANEOUS. The Offer is not being made to, nor will the Company
accept tenders from, stockholders in any state of the United States or any
foreign jurisdiction in which the Offer or the acceptance thereof would not be
in compliance with the laws of such state or foreign jurisdiction. The Company
is not aware of any state or foreign jurisdiction the laws of which would
prohibit the Offer or such acceptance. In those jurisdictions whose laws require
the Offer to be made by a licensed broker or dealer the Offer is being made on
behalf of the Company by one or more registered brokers or dealers licensed
under the laws of such jurisdiction.
BANYAN STRATEGIC LAND FUND II
22
<PAGE> 23
The Depositary will accept legible copies of the Letter of Transmittal,
which should be sent, together with certificates for the Shares tendered any
other required documents, to the Depositary at one of its addresses;
The Depositary for the Offer is:
<TABLE>
<S> <C>
By Hand or Overnight Courier: By United States Mail:
FIRST CHICAGO TRUST COMPANY OF NEW YORK FIRST CHICAGO TRUST COMPANY OF NEW YORK
Tenders & Exchanges Tenders & Exchanges
Suite 4680-BSL Suite 4660-BSL
14 Wall Street P.O. Box 2559
8th Floor Jersey City, New Jersey 07303-2559
New York, New York 10005
</TABLE>
Please contact the Information Agent at the telephone numbers and address
below with any questions or requests for assistance or additional copies of the
Offer to Purchase and Letters of Transmittal and Notice of Guaranteed Delivery.
(LOGO)
Wall Street Plaza
New York, New York 10005
(212) 509-6240 (collect)
Bankers and Brokers call collect (212) 440-9800
CALL TOLL FREE: 1-800-223-2064
23
<PAGE> 1
BANYAN STRATEGIC LAND FUND II
FOR IMMEDIATE RELEASE
<TABLE>
<S> <C>
CONTACT: Robert G. Higgins
PHONE: (312) 553-9800
FAX: (312) 553-0450
</TABLE>
BANYAN STRATEGIC LAND FUND II
ANNOUNCES $17 MILLION TENDER OFFER
Chicago, Illinois -- May 5, 1995 -- Banyan Strategic Land Fund II (Nasdaq:
VSLF) announced today the commencement of a tender offer for up to 10,000,000 of
its shares at a purchase price of $1.70 per share. Details of the offer appear
in a paid advertisement on page C9 of the May 5, 1995 issue of the Wall Street
Journal (copy attached).
Trading in the stock closed on May 4, 1995 at $1 5/16 per share.
-END-
150 S. Wacker Drive - Suite 2900 - Chicago, IL 60606 - 312 553 9800 -
Fax 312 553 0450
