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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 14D-1
TENDER OFFER STATEMENT PURSUANT TO SECTION 14(d)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
AMENDMENT NO. 2
PAINEWEBBER R&D PARTNERS II, L.P.
(Name of subject company)
BIOROYALTIES, L.L.C.
PHARMACEUTICAL ROYALTIES, L.L.C.
PHARMACEUTICAL ROYALTY INVESTMENTS LTD.
(Bidder)
UNITS OF LIMITED PARTNERSHIP INTEREST
(Title of class of securities)
695922 20 3
(CUSIP Number)
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PABLO LEGORRETA, DAVE MADDEN
BIOROYALTIES, L.L.C.
70 E. 55th St., 23rd Floor
New York, NY 10022
(800) 600-1450
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COPIES TO:
F. GEORGE DAVITT, ESQ.
TESTA, HURWITZ & THIBEAULT, LLP
HIGH STREET TOWER
125 HIGH STREET
BOSTON, MA 02110
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This Amendment No. 2 amends and supplements the Tender Offer
Statement, as amended, on Schedule 14D-1, as amended, filed by BioRoyalties,
L.L.C., a Delaware limited liability company (the "Purchaser"), on behalf of
Pharmaceutical Royalties, L.L.C, a Delaware limited liability company, and
Pharmaceutical Royalty Investments Ltd., a Bermuda company (collectively the
"Funds"), relating to the offer by Purchaser to purchase outstanding Units of
Limited Partnership Interest (the "Units"), of PaineWebber R&D Partners II,
L.P. (the "Partnership"), a Delaware limited partnership, at $3,650 per Unit,
net to the seller in cash, on the terms and subject to the conditions set
forth in the Offer to Purchase, dated August 15, 1997 (the "Offer to
Purchase"), and in the related Letter of Transmittal and any amendments or
supplements thereto, copies of which are attached hereto as Exhibits (a)(1)
and (a)(2), respectively (which collectively constitute the "Offer").
As of 5:00 p.m., New York City time on Friday, September 12, 1997,
approximately 692 Units have been tendered in the Offer.
The expiration date of the Offer is hereby amended so that the Offer
will expire at 12:00 midnight, New York City time on September 26, 1997.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS
Item 11 is hereby amended as follows:
(a)(5) Letter from BioRoyalties, L.L.C. dated September 12, 1997 among
other things extending the expiration date of the Offer until
12:00 midnight, New York City time on September 26, 1997
(a)(6) Press Release dated September 12, 1997
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SIGNATURES
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete
and correct.
Dated: September 15, 1997 BIOROYALTIES, L.L.C.
By: /s/ David Madden
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Title: Managing Member of Pharmaceutical
Partners, L.L.C., the Manager
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PHARMACEUTICAL ROYALTIES, L.L.C.
By: /s/ Pablo Legorreta
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Title: Managing Member of Pharmaceutical
Partners, L.L.C., the Manager
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PHARMACEUTICAL ROYALTY
INVESTMENTS LTD.
By: /s/ Pablo Legorreta
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Title: Managing Member of Pharmaceutical
Partners, L.L.C., the Manager
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2
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EXHIBIT INDEX
EXHIBIT DESCRIPTION
- ------- -----------
(a)(5) Letter from BioRoyalties, L.L.C. dated September 12, 1997
among other things extending the expiration date of the Offer
until 12:00 midnight, New York City time on September 26, 1997
(a)(6) Press Release dated September 12, 1997
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Exhibit (a)(5)
September 12, 1997
To Limited Partners of PaineWebber R&D Partners II, L.P.:
A number of limited partners have asked about the potential tax
consequences that may result from the sale of their Units in
PaineWebber R&D Partners II. BioRoyalties recently obtained the
federal income tax information summarized below and believes it
to be material to your evaluation of the Offer. Accordingly, we
are extending the Offer and strongly suggest that you consult
your tax advisor regarding this information.
* SIGNIFICANT PASSIVE ACTIVITY LOSS CARRYFORWARD. At year-end
1996, a limited partner who has held Units since the
inception of the Partnership (an "Original Holder") has
incurred cumulative net passive activity losses of
approximately $5,882 PER UNIT. If you are an Original
Holder and have not already used these losses in prior years
to offset passive activity income from other investments,
the sale of your Unit(s), to the extent such sale is a
"complete disposition" of your Unit(s), may enable you to
use the losses this year. As a result, the GAIN FROM THE
SALE ($3,650 PER UNIT, IN THE CASE OF AN ORIGINAL HOLDER OR
HOLDER WITH ZERO BASIS IN THE UNITS) MAY BE ENTIRELY OFFSET
AND THEREFORE NOT TAXED. IN ADDITION, THE REMAINING PASSIVE
ACTIVITY LOSS FOR SUCH LIMITED PARTNER (APPROXIMATELY $2,232
PER UNIT, IN THE CASE OF AN ORIGINAL HOLDER OR HOLDER WITH
ZERO BASIS IN THE UNITS) MAY BE USED TO OFFSET OTHER INCOME,
RESULTING IN POSSIBLE SIGNIFICANT ADDITIONAL VALUE THIS
YEAR.
BIOROYALTIES IS NOT MAKING ANY REPRESENTATION OR EXPRESSING
ANY OPINION AS TO THE TAX CONSEQUENCES OF SELLING UNITS.
ACTUAL TAX CONSEQUENCES WILL DEPEND ON EACH HOLDER'S
PARTICULAR TAX SITUATION, INCLUDING, BUT NOT LIMITED TO, THE
LENGTH OF TIME THE HOLDER HAS HELD THE UNITS AND THE
HOLDER'S STATUS AS A U.S. TAX RESIDENT. EACH HOLDER IS
STRONGLY URGED TO CONSULT HIS OR HER TAX ADVISOR WITH
RESPECT TO THE TAX CONSEQUENCES OF THIS OFFER.
* OUR OFFER MAY BE MORE ATTRACTIVE TO YOU WHEN THE TAX CONSEQUENCES
ARE CONSIDERED. In comparing our Offer to PaineWebber's
estimated value we ask you to consider the following:
1) PaineWebber's valuation of $5,555 to $6,965 represents
an estimate of the current value of a stream of
payments that you may receive over the next 10 years.
It is an estimate and, as stated by PaineWebber, "[it]
and the Partnership are unable to provide any assurance
that the actual value may be realized." OUR OFFER AND
THE POSSIBLE TAX BENEFITS THAT ARISE FROM THE SALE ARE
KNOWN AMOUNTS AND MAY BE REALIZED CURRENTLY.
2) PaineWebber's valuation is before taxes.
IN SUMMARY, ASSUMING THAT YOU ARE AN ORIGINAL HOLDER AND THAT YOU
HAVE AND MAY USE THE ENTIRE $5,882 PASSIVE ACTIVITY LOSS
CARRYFORWARD CURRENTLY, BY SELLING ALL OF YOUR UNITS YOU WILL
RECEIVE $3,650 PER UNIT NET OF TAXES FROM BIOROYALTIES AND AN
ADDITIONAL $2,232 PASSIVE ACTIVITY LOSS CARRYFORWARD THAT MAY BE
USABLE THIS YEAR.
THE OFFER AND WITHDRAWAL RIGHTS WILL NOW EXPIRE AT 12:00
MIDNIGHT, NEW YORK CITY TIME ON SEPTEMBER 26, 1997, unless
further extended. All other terms and conditions remain as set
forth in the Offer to Purchase and the Letter of Transmittal
dated August 15, 1997, a copy of which you should have previously
received. If you have already tendered your Units, we appreciate
your participation and anticipate making payment to all who
tender within 30 days after the new Expiration Date. Please call
either The Herman Group (800-243-3399) or BioRoyalties
(800-600-1450) for a copy of the Offer documentation or with any
questions you might have.
Thank you for taking the time to consider this additional
information.
Very truly yours,
BioRoyalties, L.L.C.
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POTENTIAL VALUE OF OFFER TO AN ORIGINAL HOLDER INCLUDING ACCELERATED
UTILIZATION OF PASSIVE ACTIVITY LOSS CARRYFORWARD
UPON COMPLETE DISPOSITION OF YOUR INTEREST
<TABLE>
<S> <C> <C>
1. Offer Price per Unit $3,650
Less: estimated basis on the investment 0
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Resulting gain, not taxed (a) $3,650 (a)
2. Cumulative passive activity losses carryforward per Unit as of 12/31/96 $5,882 (b)
Less: amount used to offset gain which
results from sale of Unit (3,650)
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Remaining cumulative passive activity loss available $2,232
upon sale of Unit to offset other income
</TABLE>
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(a) Resulting gain is offset by the passive activity losses carryforward.
Therefore, the $3,650 purchase price is not taxed.
(b) Cumulative passive activity loss carryforward per Unit as of 12/31/96
assuming an investor has not previously used such losses to offset passive
activity income from other investments.
THIS ILLUSTRATIVE ANALYSIS SHOULD NOT BE CONSTRUED AS A RECOMMENDATION TO ACCEPT
OR DECLINE THE OFFER.
THE PURCHASER IS NOT MAKING ANY REPRESENTATION OR EXPRESSING ANY OPINION AS TO
THE TAX CONSEQUENCES OF TENDERING UNITS. ACTUAL TAX CONSEQUENCES WILL DEPEND ON
EACH HOLDER'S PARTICULAR TAX SITUATION. EACH HOLDER IS STRONGLY URGED TO
CONSULT HIS OR HER TAX ADVISOR WITH RESPECT TO THE TAX CONSEQUENCES OF
TENDERING UNITS.
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Exhibit (a)(6)
FOR IMMEDIATE RELEASE
CONTACT: The Herman Group, Inc.
(800) 243-3399
Attention: Sherri Herman
BIOROYALTIES, L.L.C. EXTENDS TENDER OFFER
NEW YORK, NEW YORK, (September 12, 1997)........BioRoyalties,
L.L.C., has announced its offer to purchase outstanding units of
limited partnership interest ("Units") in PaineWebber R&D
Partners II, L.P (the "Partnership") for $3,650.00 per Unit has
been extended and is now scheduled to expire at 12:00 Midnight,
(Eastern Standard Time), on September 26, 1997. As of close of
business on September 12, 1997, approximately 692 Units had been
tendered and not withdrawn.
For additional information, contact The Herman Group, Inc.,
the Information Agent/Depositary for the Offer at (800) 243-3399.
