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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report: August 18, 1995
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(Date of the earliest event reported)
OPPENHEIMER CAPITAL, L.P.
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(Exact name of registrant as specified in its charter)
DELAWARE 1-9597 13-3412614
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(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) File Number) Identification Number)
OPPENHEIMER TOWER
WORLD FINANCIAL CENTER, NEW YORK, NEW YORK 10281
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(Address of principal executive office) (Zip Code)
(212) 667-7000
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(Registrant's telephone number including area code)
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ITEMS 1-4. Not Applicable.
ITEM 5. Other Events.
On August 18, 1995, Oppenheimer Management Corporation ("OMC") and
Oppenheimer Capital signed an agreement whereby OMC will, subject to certain
conditions, acquire the investment advisory and other contracts and
associated business relationships of Oppenheimer Capital in twelve of the
Quest for Value Funds (the "Acquired Funds"). The transaction has been
approved by the Boards of OMC and the Quest for Value Funds but is subject to
the approval of the shareholders of each Quest for Value Fund.
The twelve Quest for Value Funds had total net assets, as of July 31,
1995, of approximately $1.6 billion, including $1.25 billion in six equity
funds and approximately $330 million in six fixed-income funds. As of July
31, 1995, OMC and its affiliates had assets of more than $36 billion under
management in more than 45 mutual funds.
Under the terms of the agreement, after the closing of the transaction the
portfolios of the six equity funds (each a "Continuing Fund") -- Quest for
Value Fund, Inc., Quest for Value Global Equity Fund, Inc., Quest for Value
Opportunity Fund, Quest for Value Small Capitalization Fund, Quest For Value
Growth and Income Fund and Quest for Value Officers Fund -- will continue to
be managed by Quest for Value Advisors, an affiliate of Oppenheimer Capital,
under subadvisory agreements with OMC, and OMC will act as the investment
manager to the funds. Under this arrangement, the current portfolio
management teams will continue to manage the funds after the acquisition is
completed.
Each of the six Quest for Value fixed-income funds will be merged into
funds currently managed by OMC (each a "Reorganized Fund"). Quest for Value
Investment Quality Income Fund, Quest for Value U.S. Government Income Fund
and Quest for Value Global Income Fund will be merged into Oppenheimer Bond
Fund, Oppenheimer U.S. Government Trust and Oppenheimer Strategic Income
Fund, respectively. The three Quest for Value tax-exempt funds -- the
National, California and New York Tax-Exempt Funds -- will be merged into
Oppenheimer Tax-Free Bond Fund, Oppenheimer California Tax-Exempt Fund and
Oppenheimer New York Tax-Exempt Fund, respectively.
The transaction does not include the assets of Quest for Value's Primary,
Government and three municipal portfolios of Quest Cash Reserves or the seven
portfolios of the Quest for Value Accumulation Trust offered in variable
annuity and variable life insurance products. Likewise, the transaction does
not include those assets related to other activities of Quest for Value
Advisors. After the closing, Quest for Value Advisors will operate under a
new name, Opcap Advisors.
The purchase price for the acquisition will be based primarily on a
formula taking into account the assets of the funds at closing, as more fully
described in Exhibit A, attached hereto. As of July 31, 1995, that portion
of the purchase price would have been approximately $37.6 million. An
additional payment of up to $4.2 million may be made on the first anniversary
of the closing if the assets of the merged Quest fixed income funds are at
stated levels.
ITEM 6. Not applicable.
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ITEM 7. Exhibits.
A. Calculation of Purchase Price
The aggregate purchase price for the investment advisory and other
contracts and associated business relationships will be an amount equal to
the sum of (i) the Initial Purchase Payment (as hereinafter defined) payable
in cash at the Closing, (ii) the aggregate amount of all unamortized prepaid
commissions as of the business day immediately preceding the date of the
acquisition closing which relate to the Acquired Funds (excluding those with
respect to Citibank, N.A. described in the succeeding clause) payable in cash
at the Closing, (iii) the amount payable by OMC in respect of the right,
title and interest of Citibank, N.A. to certain commissions and (iv) the
Deferred Purchase Payment (as hereinafter defined).
The "Initial Purchase Payment" shall be an amount equal to the sum of (x)
225% of the Annualized Fee Amount (as hereinafter defined) of each
Reorganized Fund and (y) 270% of the Annualized Fee Amount of each Continuing
Fund (excluding the Quest for Value Officers Fund). The "Annualized Fee
Amount" of an Acquired Fund shall equal the product of (i) such Acquired
Fund's Closing Net Assets (as hereinafter defined) and (ii) the annual
advisory fee payable to Quest for Value Advisors by such Acquired Fund at the
rate indicated in the most recent prospectus for such Acquired Fund at the
Closing (plus any applicable annual administrative fee). "Closing Net
Assets" for an Acquired Fund shall mean the aggregate net asset value of such
Acquired Fund as of the close of business on the last business date preceding
the Closing.
The "Deferred Purchase Payment" shall be an amount equal to the aggregate
amounts determined for all Reorganized Funds pursuant to the following
formula: the Closing Payment (as hereinafter defined) times the Applicable
Percentage (as hereinafter defined). The "Closing Payment" shall be the
aggregate amount calculated for all Reorganized Funds pursuant to clause (x)
of the Initial Purchase Payment formula. The "Applicable Percentage" shall
be 100% if the Continuing Net Asset Percentage (as hereinafter defined) is
75% or more, 0% if the Continuing Net Asset Percentage is 50% or less and the
percentage determined in accordance with the following formula if the
Continuing Net Asset Percentage is between 75% and 50%: 100% - (4)(75% -
Continuing Net Asset Percentage). The "Continuing Net Asset Percentage"
shall equal the percentage obtained by dividing the Anniversary Net Assets
(as hereinafter defined) by the Closing Net Assets. The "Anniversary Net
Assets" shall mean the most recently determined aggregate net asset values of
all Reorganized Funds as of 8:00 p.m. on the first anniversary of the Closing
of each account of the Reorganized Funds which are eligible to be included in
Anniversary Net Assets in accordance with the principles set forth in the
Acquisition Agreement.
ITEM 8. Not applicable.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
OPPENHEIMER CAPITAL, L.P.
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(Registrant)
By /s/ Joseph M. La Motta
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Joseph M. La Motta
Executive Vice President and
Director of Oppenheimer
Financial Corp.;
President and Chief Executive
Officer of Oppenheimer Capital
By /s/ Sheldon M. Siegel
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Sheldon M. Siegel
Managing Director and Chief
Financial Officer of
Oppenheimer Capital
Dated: August 30, 1995
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