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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
___________________
SCHEDULE 14D-9
___________________
Solicitation/Recommendation Statement
Pursuant to Section 14(d)(4)
of the Securities Exchange Act of 1934
___________________
JONES GROWTH PARTNERS L.P.
(Name of Subject Company)
JONES GROWTH PARTNERS L.P.
JONES INTERCABLE, INC.
(Name of Person(s) Filing Statement)
LIMITED PARTNERSHIP INTERESTS
(Title of Class of Securities)
NONE
(CUSIP Number of Class of Securities)
ELIZABETH M. STEELE
VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
JONES INTERCABLE, INC.
9697 EAST MINERAL AVENUE
ENGLEWOOD, COLORADO 80112
(303) 792-3111
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications
on Behalf of the Person(s) Filing Statement)
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ITEM 1. SECURITY AND SUBJECT COMPANY
The subject company is Jones Growth Partners L.P., a Colorado limited
partnership (the "Partnership"). The address of the principal executive offices
of the Partnership is c/o Jones Intercable, Inc., 9697 East Mineral Avenue,
Englewood, Colorado 80112. The general partner of the Partnership is Jones
Spacelink Cable Corporation (the "Managing General Partner"). Jones Intercable,
Inc., a Colorado corporation, is the parent of the Managing General Partner
("Intercable"). The title of the class of equity securities to which this
Statement relates is the limited partnership interests of the Partnership (the
"Interests").
ITEM 2. TENDER OFFER OF THE BIDDER
This Statement relates to the offer (the "Offer") by Madison Liquidity
Investors 104, LLC, a Delaware limited liability company ("Madison"), to
purchase for cash up to 8,488 of the Interests, representing approximately 9.9%
of the Interests outstanding, at a purchase price of $450 per Interest (less the
$50 transfer fee and the amount of any distributions paid with respect to the
Interests between the date of Madison's Offer and the expiration date of the
Offer)(the "Offer Price"), as disclosed in the Tender Offer Statement on
Schedule 14D-1 (the "Schedule 14D-1") dated November 5, 1998 filed by Madison
with the Securities and Exchange Commission and mailed to the limited partners.
According to the Schedule 14D-1, Madison's principal business address is P.O.
Box 7461, Incline Village, Nevada 89452.
ITEM 3. IDENTITY AND BACKGROUND
(a) This Statement is being filed by the Partnership and by Intercable.
The name and business address of the Partnership is set forth in Item 1 above.
The address of Intercable and of the Managing General Partner is 9697 East
Mineral Avenue, Englewood, Colorado 80112. The Partnership's associate general
partner is Growth Partners, Inc., an affiliate of Lehman Brothers Inc. (the
"Associate General Partner"), whose address is 3 World Financial Center, 29th
Floor, New York, New York 10285. The Managing General Partner and the
Associate General Partner are referred to in this Statement collectively as the
"General Partners."
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(b)(1) Pursuant to the Partnership's limited partnership agreement (the
"Partnership Agreement"), which is filed as Exhibit (c)(1) hereto, the Managing
General Partner is the managing general partner of the Partnership. The
Managing General Partner has responsibility for all aspects of the Partnership's
operations. The Partnership itself has no officers, directors or employees. Of
the 85,740 Interests outstanding, the Managing General Partner owns 850
Interests, or approximately 1% of the outstanding Interests. The Associate
General Partner and the officers and directors of the General Partners do not
own any Interests.
The Partnership Agreement contains the terms and conditions of the
financial arrangements between the General Partners, on the one hand, and the
Partnership and its limited partners, on the other. For example, the
Partnership Agreement provides that 1% of every item of Partnership income,
loss, deduction and credit shall be allocated to the Managing General Partner,
and the Managing General Partner will be entitled to 15% and the Associate
General Partner will be entitled to 10% of the net proceeds from the sales of
Partnership-owned cable television systems after the limited partners receive a
return of 100% of their initial capital contributions plus an 8% liquidation
preference. The Managing General Partner also receives a management fee and
reimbursement of its expenses from the Partnership. The Associate General
Partner also is entitled to a supervisory fee. In addition, certain affiliates
of the General Partners currently receive, have received or in the future are
entitled to receive fees from the Partnership for programming, brokerage and
other services provided to the Partnership. Except as described herein and in
the Partnership Agreement, which is filed as Exhibit (c)(1) hereto, and in Item
13. Certain Relationships and Related Transactions of the Partnership's Annual
Report on SEC Form 10-K for the fiscal year ended December 31, 1997, which is
filed as Exhibit (c)(2) hereto, to the best knowledge of the Partnership and
Intercable, there are no material contracts, agreements, arrangements or
understandings or any actual or potential conflicts of interest between the
Partnership and its limited partners, on the one hand, and the General Partners
or the directors and executive officers of the General Partners or affiliates
thereof, on the other hand. And, except as described herein, to the best
knowledge of the Partnership and Intercable, there are no material contracts,
agreements, arrangements or understandings or any actual or potential conflicts
of interest between the Partnership and its limited partners, on the one hand,
and the General Partners or the directors and executive officers of the General
Partners or affiliates thereof, on the other hand, with respect to the Offer.
(b)(2) Except for the letter agreement dated June 17, 1997 by and among the
Managing General Partner, the Partnership and an affiliate of Madison, which is
described below and is filed as Exhibit (c)(3) hereto, relating to prior
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unregistered tender offers for Interests by affiliates of Madison, to the best
knowledge of the Partnership and Intercable, there are no material contracts,
agreements, arrangements or understandings or any actual or potential conflicts
of interest between the Partnership or the General Partners or the directors and
executive officers of the General Partners or affiliates thereof, on the one
hand, and Madison or its executive officers, directors or affiliates, on the
other hand.
During the past several years, an affiliate of Madison known as Madison
Partnership Liquidity Investors 30, LLC has acquired Interests through
unregistered tender offers for Interests in the Partnership and through
purchases of Interests on the very limited secondary market for limited
partnership interests. As of October 15, 1998, this affiliate of Madison owned
a total of approximately 4,051 Interests, or approximately 4.7% of the
outstanding Interests.
Pursuant to the terms of a letter agreement dated June 17, 1997 among the
Partnership, the Managing General Partner and the affiliate of Madison known as
Gramercy Park Investments, LP, Madison and its affiliates received a list of the
names and addresses of the limited partners of the Partnership for their use in
conducting unregistered tender offers for Interests in the Partnership. In
return for the list, which Madison recently returned to the Partnership, Madison
and its affiliates agreed to the following terms and conditions:
(1) Madison and its affiliates agreed to treat the partnership list as
confidential and proprietary information of the Partnership and the Managing
General Partner;
(2) Madison and its affiliates agreed that the list of limited partners
obtained by them pursuant to the letter agreement would be used solely for the
purpose of contacting limited partners of the Partnership to inquire as to
whether they wished to sell their Interests in the Partnership to Madison or one
of its affiliates and for no other purpose;
(3) Madison and its affiliates agreed to safeguard the list and to treat it
as confidential information;
(4) Madison and its affiliates represented that all of the Interests of the
Partnership acquired by them would be acquired for investment purposes only and
not with an intention to resell the Interests;
(5) Madison and its affiliates agreed that on any proposal or issue
submitted to a vote of the limited partners of the Partnership, Madison and its
affiliates
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would vote all of their Interests in the Partnership in the same manner as the
majority of all other limited partners who vote on any such proposal or issue;
(6) Madison and its affiliates represented that, for the 12-month period
commencing on June 17, 1997, Madison and its affiliates would not acquire,
attempt to acquire or make a proposal to acquire, directly or indirectly, more
than a 5% interest in the Partnership;
(7) Madison and its affiliates agreed to limit their purchases of Interests
in any tax year of the Partnership so as not to cause the Partnership to be
treated as a publicly traded partnership within the meaning of Section 7704 of
the Internal Revenue Code and Madison and its affiliates agreed that they would
not ask the Managing General Partner to approve any transfers of Interests in
the Partnership in any tax year of the Partnership if such transfers, together
with all other transfers made during such tax year, would cause transfers of
Interests in the Partnership to exceed the 5% safe harbor set forth in Paragraph
II, Section C(1) of Internal Revenue Service Notice 88-75;
(8) Madison and its affiliates agreed that the price offered by them for
Interests in the Partnership pursuant to their unregistered tender offers would
be no less than $325 per Interest;
(9) Madison and its affiliates agreed to submit any communication that they
intended to send to the limited partners of the Partnership in connection with
their unregistered tender offers to the Managing General Partner prior to use;
(10) Madison and its affiliates agreed to make clear in their
communications to the limited partners that they were not affiliated with the
Partnership or with the Managing General Partner;
(11) Madison and its affiliates agreed to pay costs incurred by the
Partnership in connection with the production of the partnership list and the
processing of transfers related to these unregistered tender offers including,
without limitation, all printing, mailing, and other administrative expenses
incurred by the Partnership in connection with such registered tender offers to
the extent that such costs were not covered by the transfer fees paid by Madison
and its affiliates in connection with its unregistered tender offers for
Interests and in an amount not to exceed $5,000;
(12) Madison and its affiliates agreed to use transfer of interest forms
that conformed to the transfer of interest processes approved for use by the
Managing
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General Partner, including, without limitation, the requirements for medallion
guaranteed signatures for transferors and transferees; and
(13) Madison and its affiliates agreed that they would return the list of
limited partners of the Partnership to the Managing General Partner (without
making any copies thereof) within ten business days of the completion of their
unregistered tender offers.
Madison and/or its affiliates conducted unregistered tender offers for
Interests at a price of approximately $325 per Interest.
ITEM 4. THE SOLICITATION OR RECOMMENDATION
(a) This Statement relates to the recommendation by Intercable and the
Partnership with respect to the Offer. A letter to the limited partners of the
Partnership communicating the views of Intercable and of the Partnership with
respect to the Offer is filed as Exhibit (a)(1) hereto and is incorporated
herein by reference.
For the reasons set forth below, the Partnership and Intercable are
remaining neutral and are making no recommendation as to whether limited
partners should tender their Interests in response to the Offer. In considering
whether to tender their Interests, the Partnership and Intercable believe that
limited partners should carefully consider all of the surrounding facts and
circumstances and should review all available information including, among other
things, the information contained in the Partnership's most recent quarterly
report on SEC Form 10-Q for the quarter ended September 30, 1998 as well as the
considerations noted below.
For those limited partners who have no current need for liquidity and
expect to retain their Interests in the Partnership through an anticipated
orderly liquidation of the Partnership by the end of 1999, the Offer may be
inadequate and not in their best interests. For those limited partners who have
an immediate need for liquidity or who conclude that the risks of a longer
holding period are significant, however, the Offer may indeed be adequate and in
their best interests.
(b) The reasons for the neutral position taken by the Partnership and
Intercable are as follows:
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. THE PARTNERSHIP'S CABLE TELEVISION SYSTEM IS ABOUT TO BE SOLD. In August
1998, the Partnership entered into an asset purchase agreement to sell its
Wheaton System to an unaffiliated party for a contract sales price of
$103,000,000, subject to customary closing adjustments. Intercable currently
estimates that the closing of the sale of the Partnership's cable television
system will occur during the first quarter of 1999. Because the closing of
the sale is conditioned upon, among other things, the approval of the limited
partners of the Partnership and the receipt of material third party consents
necessary for the transfer of the system to the buyer, there can be no
assurance that the proposed sale will occur or that it will occur by the end
of the first quarter of 1999.
. INTERCABLE CURRENTLY ESTIMATES THAT THE AGGREGATE CASH DISTRIBUTIONS TO
LIMITED PARTNERS FROM THE NET PROCEEDS OF THE PENDING SALE WILL BE AT LEAST
$708 PER INTEREST, AN AMOUNT SUBSTANTIALLY IN EXCESS OF THE PURCHASE PRICE
CONTAINED IN THE OFFER. The foregoing estimate reflects the expected gross
proceeds from the sale reduced by repayment of Partnership debts, the
settlement of working capital adjustments and the deposit of a portion of the
sale proceeds into an indemnity escrow account. Relative to the estimated
$708 per Interest in cash distributions from the pending sale, the Offer
Price ($450 per Interest, less the $50 transfer fee and the amount of any
distributions paid with respect to the Interests between the date of
Madison's Offer and the expiration date of the Offer) is rather low. There
can be no assurance, however, that the aggregate cash distributions to
limited partners from the net proceeds of the pending sale will be equal to
Intercable's current estimate because a variety of factors including, among
other things, unanticipated downward closing adjustments to the sales price
under the terms of the asset purchase agreement could result in a smaller
amount of net sale proceeds available for distribution to the limited
partners by the Partnership. If the cash distributions ultimately made to the
limited partners are materially less than currently estimated, the Offer
Price may in hindsight seem to be fair and adequate.
. INTERCABLE CURRENTLY ANTICIPATES THAT DISTRIBUTION OF THE NET SALE PROCEEDS
FROM THE PENDING SALE (EXCLUDING ESCROWED PROCEEDS) WILL BE MADE BY THE END
OF THE FIRST QUARTER OF 1999. Intercable currently anticipates that the
closing of the pending sale will occur during the first quarter of 1999 and
the Partnership will distribute the net sale proceeds as quickly as events
allow thereafter. Pending distribution to the limited partners, the net
proceeds from the sale will
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be held by the Partnership in short-term, interest-bearing liquid
investments, and distributions paid to limited partners will include interest
earned on such funds. Intercable currently estimates that a distribution of
the net sale proceeds from the pending sale (excluding escrowed proceeds)
will be made by the end of the first quarter of 1999. It is expected that any
remaining escrowed proceeds will be distributed by the end of 1999. There can
be no assurance, however, that the net sale proceeds from the pending sale
(excluding escrowed proceeds) will be made by the end of the first quarter of
1999 because there can be no assurance that the pending sale will close by
such date. In addition, because the escrowed proceeds will be subject to
potential claims by the purchaser of the system, there can be no assurance
that there will be a further distribution of all or any portion of the sale
proceeds to be placed in escrow.
. LIMITED PARTNERS WHO SELL ANY INTEREST TO MADISON PURSUANT TO THE OFFER WILL
NOT RECEIVE ANY DISTRIBUTIONS TO BE MADE BY THE PARTNERSHIP WITH RESPECT TO
THAT INTEREST ONCE THAT INTEREST IS TRANSFERRED TO MADISON, INCLUDING
DISTRIBUTIONS OF THE NET PROCEEDS FROM THE SALE OF THE WHEATON SYSTEM. All
distributions of net sale proceeds will be made to the limited partners of
record as of the closing date of the pending sale, which is expected to occur
in the first quarter of 1999 and after the announced expiration date of the
Offer.
. AS SET FORTH IN MADISON'S MATERIALS MAILED TO THE LIMITED PARTNERS, MADISON
IS MAKING THE OFFER FOR INVESTMENT PURPOSES AND WITH THE INTENTION OF MAKING
A PROFIT FROM THE OWNERSHIP OF THE INTERESTS. In establishing the purchase
price of $450 per Interest (less the $50 transfer fee and the amount of any
distributions paid with respect to the Interests between the date of
Madison's Offer and the expiration date of the Offer), Madison was motivated
to establish the lowest price that might be acceptable to limited partners
consistent with Madison's objectives.
. BECAUSE OF THE LIMITED NUMBER OF INTERESTS THAT CAN BE TRANSFERRED DURING THE
REMAINDER OF 1998, IT IS PROBABLE THAT ALL OR A SIGNIFICANT PORTION OF THE
INTERESTS TENDERED TO MADISON PURSUANT TO THE OFFER WILL NOT BE TRANSFERRED
DURING 1998. As more fully described under Item 8 below, the Managing General
Partner will not approve transfers of Interests in any tax year of the
Partnership if such transfers, together with all other
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transfers made during such tax year, would cause transfers of Interests in
the Partnership to exceed the 5% safe harbor set forth in Paragraph II,
Section C(1) of the Internal Revenue Service Notice 88-75. As of the date of
this Statement, transfers of 3,150 Interests already have been processed
during the 1998 tax year of the Partnership and, accordingly, only 1,137
Interests remain available for transfer during the remainder of this 1998 tax
year. The Managing General Partner does anticipate that additional transfers
of Interests may be effected in the new tax year of 1999. The Managing
General Partner's policy of limiting transfers to the 5% IRS safe harbor may
have the effect of limiting the number of Interests that can be transferred
pursuant to the Offer. Limited partners who are motivated to tender their
Interests to Madison pursuant to the Offer primarily in order to make 1998
the final year for which they receive a K-1 Tax Form from the Partnership
should not assume that the transfer of their Interests will be effectuated by
the Managing General Partner in 1998. Limited partners whose Interests are
transferred to Madison in 1999 will be considered limited partners of the
Partnership during 1999 and thus they will receive K-1s for the 1999 tax year
in early 2000. It is currently anticipated the Partnership will be liquidated
and dissolved before the end of 1999 and that 1999 thus will be the final
year for which all limited partners of the Partnership will receive K-1s.
. LIMITED PARTNERS WHO FULLY LIQUIDATE THEIR INTERESTS PURSUANT TO A SALE OF
THEIR INTERESTS TO MADISON PURSUANT TO THE OFFER WILL HAVE THE OPPORTUNITY TO
LIQUIDATE THEIR INVESTMENT IN THE PARTNERSHIP WITHOUT THE USUAL TRANSACTION
COSTS ASSOCIATED WITH SECONDARY MARKET SALES, THEY WILL GAIN LIQUIDITY AND
THEY MAY BE ABLE TO REDUCE THEIR TAX PREPARATION FEES AND, IF THEIR INTERESTS
ARE HELD IN AN INVESTMENT RETIREMENT ACCOUNT OR SIMILAR DEFERRED COMPENSATION
PLAN, THEY MAY BE ABLE TO REDUCE THEIR CUSTODIAL FEES. Intercable is aware
that many limited partners incur substantial tax preparation and custodial
fees that, in some cases, may exceed the difference in value between a $708
per Interest distribution and a $450 per Interest sale to Madison. For such
limited partners, a sale of all of their Interests to Madison pursuant to the
Offer may be advantageous, but each limited partner should consult their own
financial and tax advisors with respect to these matters.
. LIMITED PARTNERS MAY BE ABLE TO SELL THEIR INTERESTS FOR A HIGHER PRICE THAN
THE PRICE OFFERED BY MADISON. Intercable recommends that limited partners who
seek liquidity but who do not
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wish to sell their Interests for cash pursuant to the Offer make their own
inquiry as to alternative transactions that may be available, including,
among others, the limited secondary market for trading limited partnership
interests, any pending tender offer and any other offer that may be announced
prior to the expiration of the Offer. For example, Intercable is aware that
Smithtown Bay, LLC, another limited partner of the Partnership that together
with its affiliates currently own approximately 3,271 Interests, or
approximately 3.8% of the outstanding Interests, is currently conducting an
unregistered tender offer for Interests at a purchase price of $500 per
Interest (less the $50 transfer fee), all as more specifically detailed in
Smithtown Bay's materials dated November 13, 1998 mailed to the limited
partners.
. MADISON MAY NOT PURCHASE ALL OF THE INTERESTS TENDERED AND MAY VOTE ITS
INTERESTS IN A MANNER ADVERSE TO OTHER LIMITED PARTNERS. Limited partners
should be aware that, because the Offer seeks to purchase only up to 8,488,
and not all, of the Interests, if any limited partner tenders Interests in
the Offer, Madison may purchase less than all of the Interests tendered by
each limited partner. See "Section 4. Proration." in Madison's Schedule 14D-1
dated November 5, 1998. Accordingly, each limited partner who tenders
Interests may continue to hold Interests in the Partnership at a time when
Madison may hold a significant number of Interests and may seek to vote those
Interests in a manner adverse to other limited partners. Limited partners
should be aware that Madison may take the position that its agreement
(described under Item 3(b)(2) above) to vote its Interests in the same manner
as a majority of all other limited partners does not apply to Interests
acquired pursuant to the Offer, although Intercable would take the position
that the commitment made by an affiliate of Madison to vote with the majority
of all limited partners would apply to all Interests owned by Madison and its
affiliates however acquired by them. The Partnership is currently conducting
a vote of the limited partners of record as of October 15, 1998 on the sale
of the Wheaton System. The Partnership does not expect to conduct any further
votes of the limited partners of the Partnership but there can be no
assurance that it will not do so. Although Intercable has no reason to
believe that Madison will vote those Interests acquired by it pursuant to the
Offer in a manner adverse to other limited partners if additional limited
partner votes become necessary, there can be no assurance that it will not do
so.
THE PARTNERSHIP AND INTERCABLE URGE ALL LIMITED PARTNERS TO CAREFULLY
CONSIDER ALL OF THE INFORMATION CONTAINED HEREIN AND TO CONSULT WITH THEIR OWN
ADVISORS,
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TAX, FINANCIAL OR OTHERWISE, IN EVALUATING THE TERMS OF THE OFFER BEFORE
DECIDING TO TENDER INTERESTS. IN PARTICULAR, THE PARTNERSHIP AND INTERCABLE HAVE
NOT TAKEN INTO ACCOUNT THE TAX CONSEQUENCES TO INDIVIDUAL LIMITED PARTNERS AS A
RESULT OF EITHER (A) THE PENDING SALE AND THE DISSOLUTION OF THE PARTNERSHIP OR
(B) ACCEPTING OR REJECTING THE OFFER, AND THOSE TAX CONSEQUENCES COULD VARY
SIGNIFICANTLY FOR EACH LIMITED PARTNER BASED ON SUCH LIMITED PARTNER'S UNIQUE
TAX SITUATION OR OTHER CIRCUMSTANCES.
NO INDEPENDENT PERSON HAS BEEN RETAINED TO EVALUATE OR RENDER ANY OPINION
WITH RESPECT TO THE FAIRNESS OF THE OFFER PRICE.
ITEM 5. PERSON RETAINED, EMPLOYED OR TO BE COMPENSATED
Neither the Partnership nor the General Partners nor Intercable, nor any
person acting on their behalf, intends to employ, retain or compensate any other
person to make solicitations or recommendations to the limited partners of the
Partnership in connection with the Offer.
ITEM 6. RECENT TRANSACTIONS AND INTENT WITH RESPECT TO SECURITIES
(a) To the best knowledge of the Partnership and Intercable, no
transactions in the Interests have been effected during the past 60 days by the
Partnership, by the General Partners, by Intercable or by any affiliates or
subsidiaries of such persons (including any executive officer or director of the
General Partners).
(b) To the best knowledge of the Partnership and Intercable, the officers
and directors of the General Partners do not own any Interests. The Associate
General Partner does not own any Interests. The Managing General Partner owns
850 Interests. The Managing General Partner does not presently intend to tender
to Madison any of its Interests.
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ITEM 7. CERTAIN NEGOTIATIONS AND TRANSACTIONS BY THE SUBJECT COMPANY
(a) The Partnership is not engaged in any negotiations in response to the
Offer that relates to or would result in: (1) an extraordinary transaction, such
as a merger or reorganization, involving the Partnership or any subsidiary of
the Partnership; (2) a purchase, sale or transfer of a material amount of assets
by the Partnership or any subsidiary of the Partnership; (3) a tender offer for
or other acquisition of securities by or of the Partnership; or (4) any material
change in the present capitalization or distribution policy of the Partnership.
As disclosed under Item 4 above, the Partnership is currently in the
process of selling its cable television system. The Partnership intends to wind
up its affairs and dissolve in late 1999 or early 2000 following the termination
of indemnity escrow period related to the pending sale. The asset purchase
agreement for the sale of the Partnership's cable television system described in
Item 4 above was entered into (and the Partnership's plans for dissolution were
formulated) prior to Madison's Offer and were not entered into (or formulated)
in response to the Offer.
(b) There are no transactions, board or partnership resolutions, agreements
in principle or signed contracts in response to the Offer, which relate to or
would result in one or more of: (1) an extraordinary transaction, such as a
merger or reorganization, involving the Partnership or any subsidiary of the
Partnership; (2) a purchase, sale or transfer of a material amount of assets by
the Partnership or any subsidiary of the Partnership; (3) a tender offer for or
other acquisition of securities by or of the Partnership; or (4) any material
change in the present capitalization or distribution policy of the Partnership.
As indicated under Item 7(a) and described under Item 4 above, however, the
Partnership, prior to the Offer, had entered into an agreement for the sale of
its cable television system and had formulated the intention to wind up its
affairs and dissolve after consummation of the sale and termination of the
indemnity escrow period related thereto. The sale of the Partnership's assets
is expected to be consummated during the first quarter of 1999 and it is
anticipated that the Partnership will be liquidated and dissolved in late 1999
or early 2000.
ITEM 8. ADDITIONAL INFORMATION TO BE FURNISHED
Limited partners are advised that all transfers of Interests of the
Partnership are subject to the Managing General Partner's consent once all
necessary transfer
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documents are received, reviewed and approved by the Managing General Partner.
The Managing General Partner will not approve transfers of Interests in the
Partnership unless the proper transfer documents are completed in full and
unless both the transferor and the transferee execute the documents with
signatures medallion guaranteed. A $50 per transfer fee also must be paid before
the Managing General Partner will consent to a transfer of Interests. Even if
all documentation is properly completed and the fee is paid, the Managing
General Partner retains the right not to consent to any transfer of Interests in
its sole discretion.
The Partnership currently is treated as a partnership for Federal income
tax purposes, and the Managing General Partner has a fiduciary duty to all
limited partners to take all action necessary to preserve this tax treatment.
The Managing General Partner will take no action that could cause the
Partnership to be treated as an association taxable as a corporation and not as
a partnership for Federal income tax purposes. It is therefore the policy of
the Managing General Partner that it will not approve any transfers of Interests
in the Partnership in any tax year of the Partnership if such transfers,
together with all other transfers made during such tax year, would cause
transfers of Interests in the Partnership to exceed the 5% safe harbor set forth
in Paragraph II, Section C(1) of the Internal Revenue Service Notice 88-75. The
Managing General Partner believes that this policy serves the best interests of
the Partnership and its limited partners and it will not be waived for any
reason. The Managing General Partner has informed Madison of this policy and,
pursuant to the June 17, 1997 letter agreement described under Item 3(b)(2)
above, Madison has agreed that it will not ask the Managing General Partner to
approve any transfers of Interests in the Partnership if such transfers,
together with all other transfers made during such tax year, would cause
transfers of Interests in the Partnership to exceed the 5% safe harbor. The
Managing General Partner believes, and it has informed Madison of its belief,
that this commitment of Madison relates to transfer requests arising from the
Offer.
Section 3.5(a) of the Partnership Agreement sets forth the conditions for
the transfer of Interests. Among other provisions, Section 3.5(a) of the
Partnership Agreement provides that Interests "may be assigned only with the
consent of the Managing General Partner in its sole discretion" and that "the
Managing General Partner may refuse to consent to any transfer if, in the sole
discretion and judgment of the Managing General Partner, the transfer would be
transacted on, or treated as transacted on, a secondary market or the
substantial equivalent thereof or would cause the aggregate transfers to exceed
permissible safe harbor limits on the trading of interests under administrative
interpretations under Section 7704 of the Code; not withstanding the foregoing,
no transfers or
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assignments will be permitted if such transfers or assignments would cause the
aggregate transfers or assignments to exceed the permissible safe harbor limits
under administrative interpretations under Section 7704 of the Code." From the
outset of the Partnership, the Managing General Partner has refused to consent
to any transfer if, in the sole discretion and judgment of the Managing General
Partner, the transfer would be transacted on, or treated as transacted on, a
secondary market or the substantial equivalent thereof or would cause the
aggregate transfers to exceed permissible safe harbor limits on the trading of
interests under administrative interpretations under Section 7704 of the Code.
The provisions of the Partnership Agreement together with advice the Managing
General Partner and the Partnership have received from its outside tax
consultants at Arthur Andersen LLP, form the basis for the Managing General
Partner's policy to deny transfers of Interests if such transfers would exceed
the 5% IRS safe harbor.
This policy of limiting transfers to the 5% IRS safe harbor may have the
effect of limiting the number of Interests that can be transferred pursuant to
the Offer. As of the date of this Statement, transfers of 3,150 Interests
already have been processed during the 1998 tax year of the Partnership and,
accordingly, only 1,137 Interests remain available for transfer during the
remainder of this 1998 tax year. The Managing General Partner anticipates that
additional transfers of Interests may be effected in the new tax year of 1999.
All distributions to limited partners of the Partnership from the net
proceeds of the sales of the Partnership's cable television systems will be made
to the Partnership's limited partners of record as of the closing dates of the
sales of the systems. Therefore, all distributions to limited partners of the
Partnership from the net proceeds of the sale of the Wheaton System will be made
to the Partnership's limited partners of record as of the closing date of the
sale of the system. Limited partners who tender their Interests to Madison
pursuant to the Offer prior to the record date for the sale distributions will
not receive distributions from the sale.
In addition, limited partners are advised that because transferees of
Interests following the closing date of the sale of the cable television system
owned by the Partnership would not be entitled to any distributions from the
Partnership, transfers of Interests following the closing date of the sale of
the system held by the Partnership would have no economic value. The Managing
General Partner therefore has determined that, pursuant to the authority granted
to it by Section 3.5(a)(1) of the Partnership Agreement, it will not approve any
transfers of Interests following the closing of the sale of the Partnership's
cable
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television systems. Transfers of Interests pursuant to registered or
unregistered tender offers, in the secondary market or otherwise will therefore
not be possible following the closing the sale of the Partnership's cable
television systems, which is expected to occur before the end of the first
quarter of 1999.
Secondary market sales activity for the Interests, including privately
negotiated sales, has been limited and sporadic. The Partnership's Annual
Report on SEC Form 10-K for the fiscal year ended December 31, 1997 states that
"there is no public market for the limited partnership interests and it is not
expected that a market will develop in the future." Privately negotiated sales
and sales through intermediaries (e.g., through the matching services for buyers
and sellers of partnership interests operated by certain firms unaffiliated with
the General Partners and the Partnership) currently are the primary means
available to a limited partner to liquidate an investment in the Interests
(other than tender offers to purchase, including the Offer) because the
Interests are not listed or traded on any exchange or quoted on any NASDAQ list
or system. Because there has never been an established trading market for the
Interests, Intercable and the Partnership do not have access to any reliable,
official information about the historical or current market prices for the
Interests in the very limited secondary market where the Interests from time to
time have been sold. Intercable believes that the secondary market deeply
discounts the underlying value of the Interests due to their highly illiquid
nature. Therefore, even if trading information were available, the historical
or current market prices for the Interests would not necessarily be indicative
of the value of the Interests and/or the Partnership's cable television system
assets.
During the past several years, however, several limited partners of the
Partnership who are not in any other way affiliated with the Partnership or the
General Partners conducted unregistered tender offers for Interests in the
Partnership at prices ranging from $300 per Interest to $325 per Interest.
Madison and/or an affiliate conducted unregistered tender offers for Interests
at a price of approximately $325 per Interest pursuant to which Madison and its
affiliates acquired approximately 4,051 Interests, approximately 4.7% of the
outstanding Interests.
15
<PAGE>
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Description
- --------- -----------
<C> <S>
(a)(1) Letter dated November 19, 1998, from the Partnership and Jones
Intercable, Inc. to the limited partners of Jones Growth Partners L.P.
(c)(1) Limited Partnership Agreement of Jones Growth Partners L.P. made and
entered into as of June 9, 1989, by and among Jones Spacelink Cable
Corporation and Growth Partners, Inc., as general partners, and the
limited partners (previously filed with the Securities and Exchange
Commission as Exhibit 3 to the Partnership's Annual Report on Form 10-K
for the fiscal year ended December 31, 1989 (File No. 0-17916) filed in
March 1990 and hereby incorporated herein by reference).
(c)(2) Item 13. Certain Relationships and Related Transactions on pages 28 and
29 of the Partnership's Annual Report on Form 10-K for the fiscal year
ended December 31, 1997 (previously filed with the Securities and
Exchange Commission (File No. 0-17916) in March 1998 and hereby
incorporated herein by reference).
(c)(3) Letter Agreement dated June 17, 1997 by and among Jones Spacelink Cable
Corporation, Jones Growth Partners L.P. and Gramercy Park Investments, LP
relating to prior unregistered tender offers for Interests by an
affiliate of Madison.
</TABLE>
16
<PAGE>
After reasonable inquiry and to the best of our knowledge and belief, we
certify that the information set forth in this Statement is true, complete and
correct.
JONES GROWTH PARTNERS L.P.,
a Colorado limited partnership
By: Jones Spacelink Cable Corporation,
its managing general partner, a Colorado
corporation
By: /s/ James B. O'Brien
------------------------------------------
James B. O'Brien
President
JONES INTERCABLE, INC., a
Colorado corporation
By: /s/ Kevin P. Coyle
------------------------------------------
Kevin P. Coyle
Group Vice President/Finance
Dated: November 19, 1998
17
<PAGE>
[JONES INTERCABLE LOGO]
Exhibit (a)(1)
November 19, 1998
Dear Limited Partner of Jones Growth Partners L.P.:
Jones Growth Partners L.P., a Colorado limited partnership (the
"Partnership"), and Jones Intercable, Inc., a Colorado corporation
("Intercable") and the parent of Jones Spacelink Cable Corporation, the managing
general partner of the Partnership have reviewed the unsolicited tender offer to
purchase limited partnership interests of the Partnership (the "Interests") for
a purchase price of $450 per Interest (the "Offer") made by Madison Liquidity
Investors 104, LLC, a Delaware limited liability company ("Madison"), on
November 5, 1998. The Partnership and Intercable have filed with the Securities
and Exchange Commission a Recommendation Statement on Schedule 14D-9, relating
to the Offer. A copy of that Recommendation Statement on Schedule 4D-9 is
enclosed with this letter and it should be carefully reviewed by each limited
partner. As more fully described in the Recommendation Statement on Schedule
14D-9, the Partnership and Intercable are making no recommendation as to whether
limited partners should tender their Interests in response to the Offer. For
those limited partners who have no current need for liquidity and expect to
retain their Interests in the Partnership through an anticipated orderly
liquidation of the Partnership by the end of 1999, the Offer may be inadequate
and not in their best interests. For those limited partners who have an
immediate need for liquidity or who conclude that the risks of a longer holding
period are significant, however, the Offer may indeed be adequate and in their
best interests.
In considering whether to tender Interests, the Partnership and Intercable
believe that limited partners should carefully consider all of the facts and
circumstance and should review all available information. Factors that could
affect a limited partner's decision may include, but are by no means limited to,
the following:
. The Partnership's cable television system is about to be sold, and Intercable
currently estimates that the closing of the sale will occur during the first
quarter of 1999.
. Aggregate cash distributions to limited partners from the net proceeds of the
pending sale are currently estimated to be at least $708 per Interest, an
amount substantially greater than the $450 per Interest that Madison is
offering.
. A distribution of a substantial portion of the net sale proceeds is expected
to be made by the end of the first quarter of 1999.
<PAGE>
. Limited partners who sell any Interests to Madison pursuant to the Offer will
not receive any distributions to be made from the pending sale.
. As set forth in the materials you received from Madison, Madison is making its
Offer for investment purposes and with the intention of making a profit from
its ownership of the Interests.
. Limited partners who desire to sell their Interests have other means of doing
so, including by tendering Interests to Smithtown Bay, LLC, which is conduct
an unregistered tender offer pursuant to which it is offering to purchase
Interests is at a purchase price of $500 per Interest.
TO THE EXTENT THAT YOU HAVE PREVIOUSLY TENDERED INTERESTS PURSUANT, TO
MADISON'S OFFER, YOU SHOULD CONSIDER THAT YOU HAVE A RIGHT TO WITHDRAW YOUR
TENDER BY FOLLOWING THE PROCEDURES SET FORTH UNDER "SECTION 5. WITHDRAWAL
RIGHTS" IN MADISON'S OFFER TO PURCHASE DATED NOVEMBER 5, 1998. Madison's Offer
to Purchase provides that Interests tendered pursuant to Madison's Offer may be
withdrawn at any time prior to the Offer's expiration date. For withdrawal to be
effective, a written notice of withdrawal must be timely received by Madison's
transfer agent, Gemisys Tender Services at 7103 South Revere Parkway, Englewood,
Colorado 80112 before Madison's Offer expires. Any such notice of withdrawal
must specify the name of the person who tendered the Interests to be withdrawn
and must be signed by the person(s) who signed the Agreement of Assignment and
Transfer in the same manner as the Agreement of Assignment and Transfer was
signed and it must also contain a medallion signature guarantee.
The attached Recommendation Statement on Schedule 14D-9 expands upon the
reasons for the neutral position taken by the Partnership and Intercable
concerning Madison's Offer, and contains additional information about the
potential risks to limited partners from their continuing to hold their
Interests through the planned liquidation of the Partnership. We urge you to
read the Schedule 14D-9 carefully.
Very truly yours,
Jones Growth Partners L.P.,
a Colorado limited partnership
By: Jones Spacelink Cable Corporation,
a Colorado corporation,
its managing general partner
Jones Intercable, Inc., a
Colorado corporation and the parent
of Jones Spacelink Cable Corporation
<PAGE>
[JONES INTERCABLE, INC. LOGO]
Exhibit (c)(3)
June 17, 1997
Ronald Dickerman
Bryan E. Gordon
Gramercy Park Investments, LP
c/o Madison Avenue Capital Group LLC
555 Fifth Avenue - Ninth Floor
New York, New York 10017
Re: Jones Growth Partners L.P.
Request for Limited Partnership List
Dear Messrs. Dickerman and Gordon:
I am writing to respond, on behalf of Jones Spacelink Cable
Corporation (the "General Partner"), to your request for a list of the names,
addresses and related interest holdings of the limited partners of Jones Growth
Partners L.P. (the "Partnership"). As you have been made aware, the General
Partner carefully limits access to this information to protect the
confidentiality interests of the Partnership and its limited partners and to
guard against any possible commercial exploitation of the list or its use for
any other improper or non-partnership purpose.
Our records indicate that Gramercy Park Investments, LP ("Gramercy")
is a limited partner of the Partnership. Based on your representation to the
General Partner that Gramercy intends to use the list for the sole purpose of
seeking to increase Gramercy's ownership in the Partnership via a limited tender
offer, and subject to Gramercy's agreeing to the terms and conditions set forth
in this letter agreement, the General Partner will provide you with a list of
names, addresses and related interest holdings of the limited partners of the
Partnership.
<PAGE>
Ronald Dickerman
Bryan E. Gordon
June 17, 1997
Page 2
1. Within 10 business days of the General Partner's receipt of a fully
executed original of this letter agreement, the General Partner will deliver to
Gramercy a list of the names and addresses of the limited partners, with the
number of partnership interests held by each limited partner in the Partnership.
The parties agree that, to the extent any list delivered pursuant to this letter
agreement reflects a limited partner's interest as being held by a custodian,
the General Partner shall be deemed to have satisfied its obligation under this
letter agreement by identifying each custodian.
2. Gramercy acknowledges that the information being provided by the
General Partner relating to the Partnership pursuant to this letter agreement
constitutes confidential and proprietary information of the General Partner
and/or the Partnership. Gramercy agrees that the list of limited partners
obtained by it pursuant to this letter agreement shall be used solely for the
purpose of contacting limited partners of the Partnership to inquire as to
whether they wish to sell their interests in the Partnership to Gramercy or one
of its affiliates and for no other purpose. Gramercy, its general partners,
officers, directors, principals, agents and affiliates will make all reasonable
efforts to safeguard the list and the information contained therein from
disclosure to third parties, and will not furnish the list or the information
contained therein to any other person or entity. This letter agreement,
including this paragraph relating to confidentiality and the uses to which the
partnership list may be put, shall be binding upon Gramercy, its general
partners, officers, directors, principals, agents and affiliates, and shall
survive the termination of the limited tender offer contemplated to be
undertaken by Gramercy for a period of two (2) years.
3. Gramercy represents that all limited partnership interests of the
Partnership acquired by it pursuant to the proposed limited tender offer will be
acquired for investment purposes only and not with an intention to resell the
interests.
4. In order to avoid disrupting the possible sale of all or
substantially all of the Partnership's assets and any required vote of the
limited partners of the Partnership, Gramercy agrees that on any proposal or
issue submitted to a vote of the Partnership's limited partners, Gramercy will
vote all
<PAGE>
Ronald Dickerman
Bryan E. Gordon
June 17, 1997
Page 3
of its limited partnership interests in the Partnership in the same manner as
the majority of all other limited partners who vote on any such proposal or
issue.
5. Gramercy represents that, for the period commencing as of the date
of this letter agreement and continuing for 12 months thereafter, Gramercy and
any person or entity controlled, managed or advised by it shall not in any
manner acquire, attempt to acquire or make a proposal to acquire, directly or
indirectly, more than a 5% interest in the Partnership.
6. Gramercy agrees to limit its purchases of limited partnership
interests in any tax year of the Partnership so as not to cause the Partnership
to be treated as a publicly traded partnership within the meaning of Section
7704 of the Internal Revenue Code. Gramercy will not ask the General Partner to
approve any transfers of interests in the Partnership in any tax year of the
Partnership if such transfers, together with all other transfers made during
such tax year, would cause transfers of interests in the Partnership to exceed
the 5% safe harbor set forth in Paragraph II, Section C(l) of Internal Revenue
Service Notice 88-75.
7. Gramercy agrees that the price offered by it for limited
partnership interests in the Partnership pursuant to the proposed limited tender
offer will be no less than $325 per limited partnership interest.
8. Gramercy agrees that any communication it sends to any limited
partner identified on the list of limited partners of the Partnership being
provided to Gramercy by the General Partner pursuant to this letter agreement
shall expressly state that "Neither Jones Spacelink Cable Corporation, the
general partner of Jones Growth Partners L.P., nor Jones Growth Partners L.P. or
their respective affiliates or subsidiaries are parties to this offer." Gramercy
further agrees that it shall provide to Jones Spacelink Cable Corporation, 9697
East Mineral Avenue, P.O. Box 3309, Englewood, Colorado 80115-3309, Attn: David
K. Zonker (facsimile (303) 790-9021) a copy of any correspondence that Gramercy
proposes to send to any limited partner of the Partnership PRIOR TO USE.
<PAGE>
Ronald Dickerman
Bryan E. Gordon
June 17, 1997
Page 4
9. Gramercy agrees to pay all costs incurred by the Partnership in
connection with the production of the list and the processing of transfers
related to Gramercy's limited tender offer, including, without limitation, all
printing, mailing, personnel and other administrative expenses incurred by the
Partnership in connection with such limited tender offer (i) to the extent that
such costs are not covered by the transfer fees paid by Gramercy in connection
with Gramercy's limited tender offer for interests in the Partnership and (ii)
in an amount not to exceed $5,000. Gramercy further agrees that the transfer of
interest forms to be used by it in connection with the limited tender offer will
conform in all respects to the transfer of interest processes approved for use
by the General Partner, including, without limitation, the requirements for
guaranteed signatures of transferors and transferees.
10. Gramercy agrees that it will return the list of limited partners
of the Partnership to the General Partner (without making any copies thereof)
within 10 business days of the completion of Gramercy's limited tender offer.
If the foregoing terms and conditions are acceptable to you, please
indicate your agreement to each of the terms and conditions by signing the
enclosed duplicate original of this letter agreement in the space provided below
and returning it to the undersigned at your earliest convenience. Please also
remit a check for $150.00 payable to Jones Spacelink Cable Corporation to cover
the costs of creating, producing and mailing the list of the Partnership's
limited partners.
JONES SPACELINK CABLE
CORPORATION,
on its own behalf and
as general partner of
Jones Growth Partners L.P.,
a Colorado limited partnership
By: /s/ Elizabeth Steele
--------------------------------------
Elizabeth Steele
Vice President and Secretary
<PAGE>
Ronald Dickerman
Bryan E. Gordon
June 17, 1997
Page 5
Gramercy Park Investments, LP hereby agrees to each and all of the terms and
conditions set forth above.
By: /s/ Bryan E. Gordon
----------------------------------------
Name: Bryan E. Gordon
--------------------------------------
Title: Managing Director
-------------------------------------
Date: 6/19/97
--------------------------------------
