OPPORTUNITY PARTNERS L.P.
(914) 747-5262 Fax: (914) 747-5258
July 31, 2000
Dear Fellow Captec Shareholder:
Do you remember December 20, 1999? Many Captec shareholders
will never forget it. That was the day that Patrick L. Beach,
Captec's CEO, announced his infamous plan to eliminate its tax-
advantaged REIT status and slash your dividend from $1.52 to
$0.44 per year. It was also the day that Captec's stock price
fell by 30%. Shortly thereafter, it fell to $6 per share. Ouch!
Soon afterward, some distraught Captec shareholders
contacted us for help in derailing Mr. Beach's plan. We then
notified management that we would solicit proxies to oppose the
de-REITing scheme. At first, Mr. Beach stood firm. Finally, on
May 1, 2000, he capitulated and cancelled his plan to de-REIT
just three hours after we filed our proxy material with the SEC.
Shareholders celebrated as the stock price quickly recovered.
But, Mr. Beach says we deserve no credit for preserving Captec's
REIT status and that the stock price is up to $11 because
investors think the world of him. If you buy that, Mr. Beach
deserves the "sales job of the year" award.
Has Mr. Beach given up on his idea to de-REIT Captec and
merge it with his risky private finance company? Here is what he
himself said: "We continue to believe the plan announced in
December would maximize value for all shareholders over the long
term." It sure sounds like he may consider reviving it in the
future.
To get your vote, Mr. Beach says he is "exploring" a sale of
the company. We do not believe he is serious about selling
Captec to the highest bidder because (1) he has not redeemed the
poison pill and (2) he has not responded to inquiries from
several potential buyers. After all, a sale of Captec would mean
the end of his lucrative management fees and could cause his
other company (which relies heavily on Captec) to collapse.
Therefore, we think Mr. Beach will continue to do what is in the
best interest of only one Captec shareholder -- Patrick L. Beach!
You need to act now to make sure that Mr. Beach never gets
another chance to de-REIT Captec. The meeting is only a few days
away and the election may be close. Delay could prove hazardous
to your investment. Mr. Beach tried once to cut your dividend by
70%. If he is re-elected, he could be tempted to try something
else to bail out his shaky finance company. And, whatever it is,
it will surely be bad news for Captec shareholders. Therefore,
if you want to preserve the value of your investment, you should
return the GREEN proxy card today. If there is any doubt that it
will be received prior to the August 9, 2000 meeting, please also
fax it to us at (914) 747-5258. If you have any questions, please
call us or e-mail us at [email protected].
Yours truly,
Phillip Goldstein
Portfolio Manager
