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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: October 24, 1996
(Date of earliest event reported)
FALCON CLASSIC CABLE INCOME PROPERTIES, L.P.,
A CALIFORNIA LIMITED PARTNERSHIP
(Exact name of registrant as specified in its charter)
CALIFORNIA COMMISSION FILE: 95-4200409
(State or other jurisdiction 0-18266 (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 October 10, 1996, JJJ Group, L.L.C. disseminated a letter
stating its interest in acquiring up to 3,500 units of limited partnership
interests in Falcon Classic Cable Income Properties, L.P. (the "Registrant")
for a price of $238 per unit, less certain transaction costs. This offer was
made without the consent or involvement of the Registrant's General Partner.
The 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 October 24, 1996 which is filed
as an exhibit hereto and incorporated herein by this reference.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA
FINANCIAL INFORMATION AND EXHIBITS
(c) Exhibits
5.1 Letter to Limited Partners dated October 24, 1996.
* * * *
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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.
FALCON CLASSIC CABLE INCOME PROPERTIES, L.P.
a California limited partnership
By: Falcon Classic Cable Investors, L.P.
General Partner
By: Falcon Holding Group, L.P.
General Partner
By: Falcon Holding Group, Inc.
General Partner
Date: October 24, 1996. By: /s/ Michael K. Menerey
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Michael K. Menerey
Chief Financial Officer
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<TABLE>
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Sequentially
Numbered
Exhibit Description Page
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<S> <C> <C>
5.1 Letter to Limited 5
Partners dated
October 24, 1996
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FALCON CLASSIC INCOME PROPERTIES
474 So. Raymond Avenue
Suite 200
Pasadena, California 91105
Tel: (818) 792-7132
Fax: (818) 793-5143
October 24, 1996
Dear Limited Partner:
Falcon Classic Cable Income Properties, L.P. (the "Partnership") has
become aware that an unsolicited offer for up to 3,500 units (representing
approximately 4.9% of the outstanding Units in the Partnership), at a price of
$238 per Unit, was commenced by JJJ Group, L.L.C. ("JJJ Group") in a letter
dated October 10, 1996. This offer was made without the consent or the
involvement of the General Partner. We have considered this offer and, based on
the very limited information made available by JJJ Group, 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 General Partner's recommendation is that you reject
the JJJ Group offer. We urge you not to sign the Limited Power of Attorney that
JJJ Group sent to you and not tender your Units to JJJ Group. In evaluating the
offer, the General Partner believes that its limited partners should consider
the following information:
- - The Partnership was formed on May 15, 1989 to acquire or construct, own and
operate cable television systems. The offering price for each limited
partnership unit during the offering period was $1,000 per unit. Cash
distributions of $328 to $412 per unit were paid from formation through
April 15, 1994, at which time distributions were terminated to preserve
cash resources. In contrast, JJJ Group's offer is only $238 per unit. If
JJJ Group is successful in buying Units at the price in its offer, JJJ
Group 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. Limited
partners should note that the Partnership's cash flow (operating income
before depreciation and amortization) for the twelve months ended June 30,
1996 was $120.46 per Unit. The JJJ Group offer represents a valuation of
less than 4.5 times said cash flow (even after accounting for the
Partnership's net indebtedness).
- - Based on the information received by the General Partner, the $238 per Unit
offer by JJJ Group 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 June 1, 1996 and July 31, 1996, 403
Units were sold on the secondary market between a high of $330.15 per Unit
and a low of $295.00 per Unit. In the General Partner's opinion, the fact
that the JJJ Group offer is being made at a discount from the most recent
secondary market
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price available to the General Partner only serves to underscore the
inadequacy of the JJJ Group 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.
- - As previously described in the Second Quarter Report to Unitholders and in
a Form 8-K dated August 27, 1996 filed by the Partnership with the
Securities and Exchange Commission, the Partnership has initiated the
"Appraisal Process" provided for in its Partnership Agreement. Under this
process, the General Partner may acquire for cash some or all of the
Partnership's cable systems for an "appraised value." "Appraisal Process"
is defined in the Partnership Agreement as an appraisal undertaken by three
independent nationally recognized experts in the cable television field to
determine the fair market value of the cable systems to be appraised. One
such appraiser must be appointed by the Partnership's Conflicts Committee,
one by the General Partner and the third by the first two appraisers acting
jointly. The three appraisers have been selected as follows: (i) the
Conflicts Committee selected Arthur Andersen LLP; (ii) the General Partner
selected Kane Reece Associates, Inc.; and (iii) those two firms selected
Communications Equity Associates. The preliminary results of the Appraisal
Process are expected to be available late this year. The General Partner
will not decide whether or not to acquire any cable systems until after the
related appraisals are completed. Whether it decides to acquire systems or
not, this process will provide limited partners with further information
regarding the Partnership and the value of its assets.
For the reasons discussed above, the General Partner believes that JJJ Group's
offer is not in the best interest of the limited partners. The General Partner
recommends that you NOT transfer, agree to transfer, or tender any Units in
response to JJJ Group's offer.
If you have any questions regarding these matters or your investment, please
call our Investor Services Department at (800) 433-4287. We would be pleased to
provide you with further copies of any of the materials referred to in this
letter, including the Second Quarter Report to Unitholders. We will, of course,
keep you informed of significant events as they develop. We appreciate the
continued support and interest of our Unitholders.
Sincerely,
Falcon Classic Cable Income Properties, L.P.
A California Limited Partnership
cc: Account Representative
