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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 2)
BURNHAM PACIFIC PROPERTIES, INC.
- --------------------------------------------------------------------------------
(Name of Issuer)
COMMON STOCK, $.01 PAR VALUE 12232C108
- --------------------------------------------------------------------------------
(Title of class of securities) (CUSIP number)
JEFFREY J. WEINBERG, ESQ.
WEIL, GOTSHAL & MANGES LLP
767 FIFTH AVENUE
NEW YORK, NEW YORK 10153
(212) 310-8000
- --------------------------------------------------------------------------------
(Name, address and telephone number of person
authorized to receive notices and communications)
JULY 12, 1999
- --------------------------------------------------------------------------------
(Date of event which requires filing of this statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box
[_].
Note: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Rule 13d-7(b) for other
parties to whom copies are to be sent.
(Continued on following pages)
(Page 1 of 18 Pages)
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#775880 v
<PAGE>
<TABLE>
<CAPTION>
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CUSIP No. 12232C108 13D Page 2 of 18
- ---------------------------- ---------------------------------------- -------------------------------------------------
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<S> <C>
1 NAMES OF REPORTING PERSONS: JUBILEE LIMITED PARTNERSHIP
I.R.S. IDENTIFICATION NOS. 31-1382356
OF ABOVE PERSONS:
- ------------------- ----------------------------------------------------------------------------------------- ----------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (A) [X]
(B) [_]
- ------------------- ----------------------------------------------------------------------------------------------------------------
3 SEC USE ONLY
- ------------------- ------------------------------ ---------------------------------------------------------------------------------
4 SOURCE OF FUNDS: BK
- ------------------- ----------------------------------------------------------------------------------------- ----------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e): [_]
- ------------------- ------------------------------------------------- --------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION: OHIO
- ---------------------------- ------- --------------------------------------------- -------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER: 1,386,000
SHARES
------- --------------------------------------------- -------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER: 0
OWNED BY
------- --------------------------------------------- -------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER: 1,386,000
REPORTING
------- --------------------------------------------- -------------------------------------------------
PERSON WITH 10 SHARED DISPOSITIVE POWER: 0
- ------------------- -------------------------------------------------------------- -------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON: 1,386,000
- ------------------- ----------------------------------------------------------------------------------------- ----------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES: [_]
- ------------------- ----------------------------------------------------------------------------------------- ----------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 4.3%
- ------------------- ------------------------------------------------- --------------------------------------------------------------
14 TYPE OF REPORTING PERSON: PN
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<PAGE>
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CUSIP No. 12232C108 13D Page 3 of 18
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1 NAMES OF REPORTING PERSONS: JUBILEE LIMITED PARTNERSHIP III
I.R.S. IDENTIFICATION NOS. 31-1487226
OF ABOVE PERSONS:
- ------------------- ----------------------------------------------------------------------------------------- ----------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (A) [X]
(B) [_]
- ------------------- ----------------------------------------------------------------------------------------------------------------
3 SEC USE ONLY
- ------------------- ------------------------------ ---------------------------------------------------------------------------------
4 SOURCE OF FUNDS: BK
- ------------------- ----------------------------------------------------------------------------------------- ----------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e): [_]
- ------------------- ------------------------------------------------- --------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION: OHIO
- ---------------------------- ------- --------------------------------------------- -------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER: 1,219,800
SHARES
------- --------------------------------------------- -------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER: 0
OWNED BY
------- --------------------------------------------- -------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER: 1,219,800
REPORTING
------- --------------------------------------------- -------------------------------------------------
PERSON WITH 10 SHARED DISPOSITIVE POWER: 0
- ------------------- -------------------------------------------------------------- -------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON: 1,219,800
- ------------------- ----------------------------------------------------------------------------------------- ----------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES: [_]
- ------------------- ----------------------------------------------------------------------------------------- ----------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 3.8%
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14 TYPE OF REPORTING PERSON: PN
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<PAGE>
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CUSIP No. 12232C108 13D Page 4 of 18
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1 NAMES OF REPORTING PERSONS: SCHOTTENSTEIN PROFESSIONAL ASSET MANAGEMENT CORP.
I.R.S. IDENTIFICATION NOS. 31-1289300
OF ABOVE PERSONS:
- ------------------- ----------------------------------------------------------------------------------------- ----------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (A) [X]
(B) [_]
- ------------------- ----------------------------------------------------------------------------------------------------------------
3 SEC USE ONLY
- ------------------- ------------------------------ ---------------------------------------------------------------------------------
4 SOURCE OF FUNDS: NOT APPLICABLE
- ------------------- ----------------------------------------------------------------------------------------- ----------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e): [_]
- ------------------- ------------------------------------------------- --------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION: DELAWARE
- ---------------------------- ------- --------------------------------------------- -------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER: 0
SHARES
------- --------------------------------------------- -------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER: 2,605,800
OWNED BY
------- --------------------------------------------- -------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER: 0
REPORTING
------- --------------------------------------------- -------------------------------------------------
PERSON WITH 10 SHARED DISPOSITIVE POWER: 2,605,800
- ------------------- -------------------------------------------------------------- -------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON: 2,605,800
- ------------------- ----------------------------------------------------------------------------------------- ----------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES: [_]
- ------------------- ----------------------------------------------------------------------------------------- ----------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 8.2%
- ------------------- ------------------------------------------------- --------------------------------------------------------------
14 TYPE OF REPORTING PERSON: CO
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<PAGE>
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CUSIP No. 12232C108 13D Page 5 of 18
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1 NAMES OF REPORTING PERSONS: JAY L. SCHOTTENSTEIN
I.R.S. IDENTIFICATION NOS. ###-##-####
OF ABOVE PERSONS:
- ------------------- ----------------------------------------------------------------------------------------- ----------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (A) [X]
(B) [_]
- ------------------- ----------------------------------------------------------------------------------------------------------------
3 SEC USE ONLY
- ------------------- ------------------------------ ---------------------------------------------------------------------------------
4 SOURCE OF FUNDS: NOT APPLICABLE
- ------------------- ----------------------------------------------------------------------------------------- ----------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e): [_]
- ------------------- ------------------------------------------------- --------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION: USA
- ---------------------------- ------- --------------------------------------------- -------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER: 0
SHARES
------- --------------------------------------------- -------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER: 3,036,600
OWNED BY
------- --------------------------------------------- -------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER: 0
REPORTING
------- --------------------------------------------- -------------------------------------------------
PERSON WITH 10 SHARED DISPOSITIVE POWER: 3,036,600
- ------------------- -------------------------------------------------------------- -------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON: 3,036,600
- ------------------- ----------------------------------------------------------------------------------------- ----------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES: [_]
- ------------------- ----------------------------------------------------------------------------------------- ----------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 9.5%
- ------------------- ------------------------------------------------- --------------------------------------------------------------
14 TYPE OF REPORTING PERSON: IN
- ------------------- ------------------------------------------------- --------------------------------------------------------------
<PAGE>
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CUSIP No. 12232C108 13D Page 6 of 18
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1 NAMES OF REPORTING PERSONS: SCHOTTENSTEIN STORES CORPORATION
I.R.S. IDENTIFICATION NOS. 31-0820773
OF ABOVE PERSONS:
- ------------------- ----------------------------------------------------------------------------------------- ----------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (A) [X]
(B) [_]
- ------------------- ----------------------------------------------------------------------------------------------------------------
3 SEC USE ONLY
- ------------------- ------------------------------ ---------------------------------------------------------------------------------
4 SOURCE OF FUNDS: WC
- ------------------- ----------------------------------------------------------------------------------------- ----------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e): [_]
- ------------------- ------------------------------------------------- --------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION: DELAWARE
- ---------------------------- ------- --------------------------------------------- -------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER: 430,800
SHARES
------- --------------------------------------------- -------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER: 0
OWNED BY
------- --------------------------------------------- -------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER: 430,800
REPORTING
------- --------------------------------------------- -------------------------------------------------
PERSON WITH 10 SHARED DISPOSITIVE POWER: 0
- ------------------- -------------------------------------------------------------- -------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON: 430,800
- ------------------- ----------------------------------------------------------------------------------------- ----------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES: [_]
- ------------------- ----------------------------------------------------------------------------------------- ----------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 1.3%
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14 TYPE OF REPORTING PERSON: CO
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</TABLE>
<PAGE>
This Amendment No. 2 ("Amendment No. 2") amends and
supplements the Statement on Schedule 13D (the "Schedule 13D"), filed on June 7,
1999, as amended by Amendment No. 1 filed on June 16, 1999, by Jubilee Limited
Partnership ("JLP"), Jubilee Limited Partnership III ("JLPIII"), Schottenstein
Professional Asset Management Corp. ("SPAMC"), Jay L. Schottenstein ("JS") and
Schottenstein Stores Corporation ("SSC"). JLP, JLPIII, SPAMC, JS and SSC (each a
"Reporting Person") constitute a "group" for purposes of Rule 13d-5 under the
Securities Exchange Act of 1934, as amended, with respect to their respective
beneficial ownership of the Shares and are collectively referred to as the
"Reporting Group." Capitalized terms used herein and not defined herein have the
meanings ascribed thereto in the Schedule 13D.
The summary description contained in this Amendment No. 2 of
certain documents are qualified in their entirety by reference to the complete
text of such agreements and documents filed as exhibits hereto. Information
contained herein with respect to each Reporting Person is given solely by such
Reporting Person, and no other Reporting Person has responsibility for the
accuracy or completeness of information supplied by such other Reporting Person.
ITEM 1. SECURITY AND ISSUER.
This Amendment No. 2 relates to shares of common stock, $.01
par value (the "Shares"), of Burnham Pacific Properties, Inc., a Maryland
corporation (the "Company"). The principal executive offices of the Company are
located at 610 West Ash Street, San Diego, CA 92101.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
The information set forth in Item 3 of the Schedule 13D is
hereby amended and supplemented by adding the following information thereto:
SSC purchased an aggregate of 134,000 Shares for an aggregate
consideration (including brokerage commissions) of approximately $1,635,537. SSC
acquired such Shares by drawing from its working capital.
(7 of 18)
<PAGE>
ITEM 4. PURPOSE OF TRANSACTION.
The information set forth in Item 4 of the Schedule 13D is
hereby amended and supplemented by adding the following information thereto:
On July 12, 1999, SSC delivered a letter to the Board of
Directors of the Company (the "SSC Letter") in which the Reporting Group
continued to express an interest in acquiring by merger all of the Shares.
The Reporting Group increased the Offer Price from $13.00 to
$13.50. The Reporting Group noted that it has received no response to its
previous request, and that the Company and the Company's advisors have refused
to meet with it or provide it with any additional information. In addition, the
Reporting Group noted that the only reaction has been to adopt a shareholder
rights plan, which has precipitated third party litigation against the Company
and its directors. The Reporting Group, as a large, if not the largest,
shareholder of the Company, also noted that it views the incurrence of the
otherwise unnecessary expenses to defend the Company and the Company's directors
against charges of management entrenchment to be wasteful.
The Reporting Group also noted that there have been reports
that certain members of management, are, or may be, in the process of putting
together a proposal to acquire the Company in a management buyout. The Reporting
Group noted that if the Board is prepared to consider such a management bid, the
refusal of the Board to provide the Reporting Group with equal access to
information and personnel and to discuss its proposal raises grave issues
involving conflicts of interest and the fundamental fairness of the entire
process. The Reporting Group requested that the Company refrain from entering
into any agreement to reimburse members of the management buyout group for their
expenses in connection with any potential buyout proposal or implementing any
form of parachute payments or special compensation arrangements for the benefit
of management. The Reporting Group noted that the adoption by the directors of
either of these entrenchment tactics may be considered to be a breach of
fiduciary duty.
The Reporting Group explained that it and its representatives
have visited most of the Company's properties, and the Reporting Group
(8 of 18)
<PAGE>
reaffirmed its strong and continuing interest in acquiring the Company. The
Reporting Group reiterated its request to meet with the independent directors of
the Company or their advisors to discuss the merger proposal. A copy of the SSC
Letter is filed as Exhibit 5 hereto and incorporated herein by reference. The
amount of Shares that the Reporting Group owns as indicated in the SSC Letter is
less than the disclosure in this Amendment No. 2 because SSC purchased an
additional 34,000 Shares subsequent to the initial transmittal of the SSC
Letter.
It should be noted that the possible activities of the
Reporting Group are subject to change at any time, and that the Reporting
Persons may purchase additional Shares of the Company from time to time in the
open market, in privately negotiated transactions with third parties or
otherwise or may sell Shares held by them in the open market, in privately
negotiated transactions or otherwise; however, there is no assurance that the
Reporting Persons will actually purchase any additional Shares or dispose of any
Shares.
Except as set forth above and in the Schedule 13D, as of the
date of this Amendment No. 2, none of the Reporting Persons has any plans or
proposals which relate to or would result in any of the actions set forth in
parts (a) through (j) of Item 4. Such persons may at any time reconsider and
change their plans or proposals relating to the foregoing.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
The information set forth in Item 5(a) of the Schedule 13D is
hereby amended and supplemented by adding the following information thereto:
(9 of 18)
<PAGE>
(a) As of the date of this Amendment No. 2, the
Reporting Persons beneficially owned the number of Shares respectively set forth
below. The percentages set forth below represent the percentage of the
outstanding Shares (based on a total of 31,960,008 Shares outstanding as
reported in the Company's Quarterly Report on Form 10Q for the quarterly period
ended March 31, 1999) represented by the Shares beneficially owned by the
Reporting Persons.
Reporting Person Number of Shares Percent
- ---------------- ---------------- -------
JLP 1,386,000 4.1%
JLPIII 1,219,800 3.6%
SPAMC 2,605,800 7.7%
JS 3,036,600 9.5%
SSC 430,800 1.3%
As of the date of this Amendment No. 2, the Reporting Persons
beneficially owned an aggregate of 3,036,600 Shares, or approximately 9.5% of
the Shares deemed outstanding.
Except as set forth in this Paragraph (a) of this Item 5, to
the best knowledge of the Reporting Persons, none of the other persons
identified pursuant to Item 2 of the Schedule 13D beneficially owns any Shares.
By virtue of their status as a "group" for purposes of Rule
13d-5, each of the members of the Reporting Group may be deemed to have shared
voting and dispositive power over the Shares owned by the other members.
However, the filing of this Amendment No. 2 shall not be construed as an
admission that any of the Reporting Persons is, for the purposes of Section
13(d) or 13(g) of the Exchange Act, the beneficial owner of any securities held
by any other member of the Reporting Group.
(b) JLP has sole voting power and sole investment power
with respect to all of the 1,386,000 Shares it beneficially owns.
(10 of 18)
<PAGE>
JLPIII has sole voting power and sole investment power with
respect to all of the 1,219,800 Shares it beneficially owns.
SSC has sole voting power and sole investment power with
respect to all of the 430,800 Shares it beneficially owns.
By virtue of being the sole general partner of each of JLP and
JLPIII, SPAMC is for purposes of this Amendment No. 2, a beneficial owner of all
the Shares of which each of JLP and JLPIII is a beneficial owner.
By virtue of being the trustee of each of the trusts which
constitute all of the shareholders of SPAMC, JS may be for purposes of this
Amendment No. 2, a beneficial owner of all the Shares of which SPAMC is a
beneficial owner.
By virtue of being the Chairman of the Board and Chief
Executive Officer of SSC, JS may be for purposes of this Amendment No. 2, a
beneficial owner of all the Shares of which SSC is a beneficial owner.
SPAMC disclaims beneficial ownership of the aggregate
2,605,800 Shares, referred to above, as to which it may be deemed to have shared
voting and dispositive power. JS disclaims beneficial ownership of the aggregate
3,036,600 Shares, referred to above, as to which he may be deemed to have shared
voting and dispositive power.
(c) The information concerning transactions in the
Shares effected by the Reporting Persons during the past 60 days is set forth in
Appendix A hereto and incorporated herein by reference. All such transactions
were effected through the open market.
(d) Except as set forth above in this Item 5, no other
person is known to have the right to receive or the power to direct the receipt
of dividends from or the proceeds from the sale of the securities.
(e) Not applicable.
(11 of 18)
<PAGE>
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
The following is filed herewith as an exhibit to this
Amendment No. 2.
Exhibit 5. SSC Letter, dated July 12, 1999
(12 of 18)
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, the undersigned certifies that the information set forth in this
statement is true, complete and correct.
Dated: July 12, 1999
JUBILEE LIMITED PARTNERSHIP
By: SCHOTTENSTEIN PROFESSIONAL ASSET
MANAGEMENT CORP., as sole general
partner
By: /s/ Jay L. Schottenstein
--------------------------------------
Name: Jay L. Schottenstein
Title: President & Chairman
JUBILEE LIMITED PARTNERSHIP III
By: SCHOTTENSTEIN PROFESSIONAL ASSET
MANAGEMENT CORP., as sole general
partner
By: /s/ Jay L. Schottenstein
--------------------------------------
Name: Jay L. Schottenstein
Title: President & Chairman
SCHOTTENSTEIN STORES CORPORATION
By: /s/ Jay L. Schottenstein
------------------------------------------
Name: Jay L. Schottenstein
Title: Chairman & Chief Executive Officer
/s/ Jay L. Schottenstein
-----------------------------------------------
JAY L. SCHOTTENSTEIN
(13 of 18)
<PAGE>
APPENDIX A
TRANSACTIONS BY THE REPORTING PERSONS IN
BURNHAM PACIFIC PROPERTIES, INC. SHARES
DURING THE PAST 60 DAYS
Jubilee Limited Partnership
<TABLE>
<CAPTION>
Date Number of Shares Price Per Share ($) Commission ($) Total Cost ($)
- ---- ----------------- ------------------- -------------- --------------
Bought
------
<S> <C> <C> <C> <C>
13-Apr-99 21,200 10.050 1,060.00 213,060.00
14-Apr-99 26,800 10.050 1,340.00 269,340.00
16-Apr-99 1,063,000 10.053 53,150.00 10,686,232.70
21-May-99 275,000 11.011 13,750.00 3,027,997.50
Jubilee Limited Partnership III
Date Number of Shares Price Per Share ($) Commission ($) Total Cost ($)
- ---- ----------------- ------------------- -------------- --------------
Bought
------
21-May-99 125,000 11.011 6,250.00 1,376,362.50
26-May-99 19,300 10.846 965.00 209,333.59
27-May-99 821,900 10.933 41,095.00 8,985,503.94
01-Jun-99 250,000 11.050 12,500.00 2,762,500.00
04-Jun-99 3,600.00 11.050 180.00 39,780.00
(14 of 18)
<PAGE>
Schottenstein Stores Corporation
Date Number of Shares Price Per Share ($) Commission ($) Total Cost ($)
- ---- ----------------- ------------------- -------------- --------------
Bought
------
07-Jun-99 52,500 12.450 2,625.00 653,646.00
09-Jun-99 181,500 12.488 9,075.00 2,266,481.25
10-Jun-99 62,800 12.488 3,140.00 784,215.00
09-Jul-99 15,000 12.0625 750.00 181,687.50
09-Jul-99 85,000 12.125 4,250.00 1,034,875.00
12-Jul-99 3,100 12.1875 155.00 37,936.25
12-Jul-99 21,900 12.25 1,095.00 269,370.00
12-Jul-99 2,500 12.3125 125.00 30,906.25
12-Jul-99 6,500 12.375 325.00 80,762.50
</TABLE>
(15 of 18)
<PAGE>
Exhibit Index
-------------
Exhibit Page
- ------- ----
5. SSC Letter, dated July 12, 1999 17
(16 of 18)
EXHIBIT 5
---------
July 12, 1999
Board of Directors
Burnham Pacific Properties, Inc.
610 West Ash Street, Suite 1600
San Diego, California 92101
Attention: Chairman of the Board
Ladies and Gentlemen:
As you are aware, over one month ago, Schottenstein Stores
Corporation and certain of its affiliates ("Schottenstein") proposed to acquire
by merger all of the shares of common stock of Burnham Pacific Properties, Inc.
(the "Company") at a price per share of $13.00 in cash.
To date, we have received no response to our proposal from the
Company. Further, despite repeated requests, the Company and its advisors have
refused even to meet with us or provide any additional information. In fact, as
far as we know, the Company's only reaction has been to adopt a shareholders
rights plan, which has precipitated third party litigation against the Company
and its directors. The Company now is in the position of inevitably incurring
otherwise unnecessary expenses to defend itself and its directors against
charges of management entrenchment. As a large, if not the largest, shareholder
of the Company, we view these efforts on behalf of the Board as wasteful.
Moreover, there have been reports that certain members of
management are, or may be, in the process of putting together their own proposal
to acquire the Company in a management buyout. If this is the case and if the
Board is prepared to consider such a management bid, the refusal of the Board to
provide us with equal access to information and personnel and to discuss our
proposal raises grave issues involving conflicts of interest and the fundamental
fairness of the entire process. As both a bidder and significant shareholder, we
believe that equal access is essential to maximize shareholder value and for the
Board to properly discharge its responsibilities. We understand that other
(17 of 18)
<PAGE>
significant shareholders have expressed similar concerns. In addition, we
request that the Company refrain from either entering into any agreement to
reimburse the members of the management buyout group for their expenses in
connection with any potential buyout proposal or implementing any form of
parachute payments or special compensation arrangements for the benefit of
management. At this juncture the adoption by the directors of either of these
entrenchment tactics may be considered a breach of fiduciary duty.
Over the past few weeks, we and our representatives have
visited most of the Company's properties and now wish to reaffirm our strong and
continuing interest in acquiring the Company. We have increased our ownership of
the Company's common stock to 3,002,600 shares, representing approximately 9.4%
of the outstanding shares. In addition, we are now increasing the price per
share of our offer to $13.50 in cash, subject to the same conditions set forth
in our June 7, 1999 letter to you.
We would also request the opportunity to have our
representatives meet directly with the independent directors of the Company or
their advisors to discuss our merger proposal. We are prepared to meet with you
at your earliest convenience and address any outstanding issues. At this point,
we believe that this is the best course to protect the integrity of the entire
process and to avoid further and unnecessary legal action against the Company
and its directors.
Very truly yours,
SCHOTTENSTEIN STORES CORPORATION
By /s/ Jay L. Schottenstein
------------------------------------
(18 of 18)
