SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of report: July 23, 1997
(Date of earliest event reported)
ENSTAR INCOME/GROWTH PROGRAM SIX-B, L.P.,
a Georgia limited partnership
(Exact name of registrant as specified in its charter)
Georgia Commission File: 58-1754588
(State or other jurisdiction 0-18495 (I.R.S. Employer
of incorporation or identification No.)
organization)
10900 Wilshire Boulevard, 15th Floor
Los Angeles, California 90024
(Address of principal executive offices, including zip code)
(310) 824-9990
(Registrant's phone number, including area code)
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Item 5. Other Events
On or about July 11, 1997, Madison Partnership Liquidity Investors 36,
L.L.C. disseminated a letter stating its interest in acquiring up to 1,795 units
of limited partnership interests in Enstar Income/Growth Program Six-B, L.P.
(the "Registrant") for a price of $35 per unit, less certain transaction costs.
This offer was made without the consent or involvement of the Registrant's
Corporate General Partner. The Corporate General Partner has considered this
offer, concluded that it is inadequate and, accordingly, recommended that
limited partners not accept the offer. Pursuant to Rule 14e-2 promulgated under
the Securities Exchange Act of 1934, as amended, this recommendation and the
General Partner's bases therefor were conveyed to limited partners in a letter
dated July 23, 1997 which is filed as an exhibit hereto and incorporated herein
by this reference.
FORWARD-LOOKING STATEMENTS CONTAINED OR REFERRED TO IN THIS REPORT ARE MADE
PURSUANT TO THE SAFE HARBOR PROVISIONS OF SECTION 21E OF THE SECURITIES EXCHANGE
ACT OF 1934, AS AMENDED. INVESTORS ARE CAUTIONED THAT SUCH FORWARD-LOOKING
STATEMENTS INVOLVE RISKS AND UNCERTAINTIES INCLUDING, WITHOUT LIMITATION, THE
EFFECTS OF LEGISLATIVE AND REGULATORY CHANGES; THE POTENTIAL OF INCREASED LEVELS
OF COMPETITION FOR THE PARTNERSHIP; TECHNOLOGICAL CHANGES; THE PARTNERSHIP'S
DEPENDENCE UPON THIRD-PARTY PROGRAMMING; THE ABSENCE OF UNITHOLDER PARTICIPATION
IN THE GOVERNANCE AND MANAGEMENT OF THE PARTNERSHIP; THE MANAGEMENT FEES PAYABLE
TO THE CORPORATE GENERAL PARTNER; THE EXONERATION AND INDEMNIFICATION PROVISIONS
CONTAINED IN THE PARTNERSHIP AGREEMENT RELATING TO THE CORPORATE GENERAL
PARTNER; AND OTHER POTENTIAL CONFLICTS OF INTEREST INVOLVING THE CORPORATE
GENERAL PARTNER AND ITS AFFILIATES; AND OTHER RISKS DETAILED FROM TIME TO TIME
IN THE PARTNERSHIP'S ANNUAL REPORT ON FORM 10-K AND OTHER PERIODIC REPORTS FILED
WITH THE COMMISSION.
Item 7. Financial Statements, Pro Forma
Financial Information and Exhibits
(c) Exhibits
5.1 Letter to Limited Partners dated July 23, 1997.
* * * *
2
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ENSTAR INCOME/GROWTH PROGRAM SIX-B, L.P.
a Georgia limited partnership
By: Enstar Communications Corporation
General Partner
Date: July 23, 1997. By: /s/ Michael K. Menerey
---------------------------------
Michael K. Menerey
Chief Financial Officer
3
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Sequentially
Numbered
Exhibit Description Page
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5.1 Letter to Limited 5
Partners dated
July 23, 1997
4
(Enstar Letterhead)
July 23, 1997
Dear Limited Partner:
Enstar Income/Growth Program Six-B, Ltd. (the "Partnership") has become
aware that an unsolicited offer for up to approximately 1,795 units
(representing approximately 4.9% of the outstanding Units in the Partnership),
at a price of $35 per Unit, was commenced by Madison Partnership Liquidity
Investors 36, L.L.C. ("Madison") in a letter dated July 11, 1997. This offer was
made without the consent or the involvement of the Corporate General Partner.
Pursuant to rule 14e-2 under the Securities Exchange Act of 1934, we are
required to furnish you with our position with respect to the Madison offer. We
have considered this offer and, based on the very limited information made
available by Madison, believe that it is inadequate, not representative of the
inherent value of the Partnership's cable systems and not in your best interest
to accept. Accordingly, the Corporate General Partner's recommendation is that
you reject the Madison offer. We urge you not to sign the Agreement of
Assignment Form that Madison sent to you and not tender your Units to Madison.
In evaluating the offer, the Corporate General Partner believes that its limited
partners should consider the following information:
* The offering price for each limited partnership unit during the
offering period was $250 per unit. Cash distributions of approximately $53
per unit were paid from formation through July 1994, at which time
distributions were terminated to preserve cash resources. In contrast, the
Madison offer is only $35 per unit. If Madison is successful in buying
Units at the bargain basement price in its offer, Madison will own units at
much lower prices than virtually all of the current partners and, in our
view, for much less than they are worth. For example, lLimited partners
should note that the Partnership's cash flow (operating income before
depreciation and amortization) for the twelve months ended September 30,
1996 was approximately $28 per unit. The Madison offer represents a
valuation of only approximately 3.7 times said cash flow (after adjustment
for the excess of total liabilities over current assets as of September 30,
1996).
* As of the date of this letter, the Corporate General Partner believes
that a reasonable range of valuation per limited partnership unit is
between $46 and $101 based on the factors noted below. The Corporate
General Partner believes that Madison's offer price is inadequate because
it is significantly less than the $46 low end of the range provided. The
Corporate General Partner did not retain a third party to conduct an
evaluation of the Partnership's assets or otherwise obtain any appraisals.
Rather, the per unit valuations provided were derived by attributing a
range of multiples to the Partnership's cash flow (operating income before
depreciation and amortization) for the twelve months ended September 30,
1996, adjusted for the excess of total liabilities over current assets. The
Corporate General Partner has selected market multiples based on, among
other things, its understanding of the multiples placed on other
transactions involving comparable cable television properties and the
securities of companies in that industry. The Corporate General Partner's
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belief as to the valuation range provided is necessarily based on economic,
industry and financial market conditions as they exist as of the date of
this letter, all of which are subject to change, and there can be no
assurance that the Partnership's cable properties could actually be sold at
a price within this range. Additionally, the valuations provided do not
give effect to any brokerage or other transaction fees that might be
incurred by the Partnership in any actual sale of the Partnership's system.
* Based on the information received by the Corporate General Partner,
the $35 per unit offer by Madison is less than the price for which units
were recently sold on the secondary market. Partnership Spectrum, an
independent industry publication, has reported that between May 1, 1997 and
June 30, 1997, 20 units were sold on the secondary market at approximately
$43 per unit. In the General Partner's opinion, the fact that the Madison
offer is being made at a discount from the most recent secondary market
price available to the General Partner only serves to underscore the
inadequacy of the Madison offer. In addition, the General Partner believes
that the price for units in the secondary market is not an accurate
reflection of the fair market value of such units due to the low volume of
transactions in that limited market and the legal and tax restrictions on
such transfers. Should unitholders wish to sell their units, there are a
number of independent firms that trade interests of limited partnership on
the secondary market, including:
Napex American Partnership Services
800-356-2739 800-736-9797
Cuyler & Associates Nationwide Partnership Marketplace
800-274-9991 800-969-8996
DCC Securities Chicago Partnership Board
800-945-0440 800-272-6273
For the reasons discussed above, the Corporate General Partner believes
that the Madison offer is not in the best interest of the limited partners and
recommends that you NOT transfer, agree to transfer, or tender any units in
response to Madison's offer.
If you have any questions regarding these matters or your investment,
please call our Investor Services Department at (800) 433-4287.
Sincerely,
Enstar Income/Growth Program Six-B, Ltd.
A Georgia Limited Partnership
cc: Account Representative
