Lexington Master Limited Partnership Inactive
Filed: 8 Mar 05, 12:00am
March 8, 2005
| Securities and Exchange Commission 500 North Capital Street Washington, D.C. 20549 Attention: Daniel F. Duchovny | MARK I. FISHER 212-940-8877 E-mail Address mark.fisher@kmzr.com Direct Fax Number (212) 935-8405 | |
| Re: | The Newkirk Master Limited Partnership Schedule TO filed February 22, 2005 File No. 005-79560 |
Gentlemen:
The following are our responses to the Staff's comment letter of March 1, 2005 with respect to Schedule TO for The Newkirk Master Limited Partnership filed on February 22, 2005.
Cover Page of Schedule TO-1
Response: The offer being made is an issuer tender offer as such term is defined in Rule 13e-4(a)(2). That rule defines an "issuer tender offer" as a tender offer "for, or a request or invitation for tender of, any class of equity securities, made by the issuer of such class of equity security or by an affiliate of such issuer." The current offer is being made directly by the issuer, The Newkirk Master Limited Partnership (the "MLP"), and not by an affiliate. In addition, the Current Issues Outline specifically provides that "the term bidder, for Regulation 14D purposes, does not include an issuer that makes a tender offer for its own securities." The discussion in the Current Issues Outline relating to the identification of the bidder focuses on situations where a separate acquisition entity is formed and does not cover tender offers made directly by an issuer. Accordingly, we do not believe that any additional "offerors" need to be identified in Form TO.
Offer to Purchase
Cover Page
Response: If any distributions are made between the date of the offer and the expiration date, the tender offer will be extended as provided in Rule 14e-1(b). We have amended Form TO to make this disclosure.
Risk Factors—Page 4
independent agent, such as a depositary, to hold tendered units until payment. See Section III.B.1 of Release No. 34-43069 for guidance.
Response: We believe that all material risks relating to the transaction of the type referred to in Release 34-43069 have been disclosed. Specifically, the risk relating to the fact that the purchase price is less than the net asset value is prominently disclosed in a number of places in the Offer to Purchase. In view of the financial condition of the MLP, we do not believe that the lack of a depositary is a risk that needs to be disclosed.
The Tender Offer
Proration; Acceptance for Payment and Payment for Units—Page 5
Response: Fractional units will be purchased and we have amended Schedule TO to make this disclosure.
Response: Schedule TO has been amended to provide that payments will be made promptly as required by Rule 13e-4(f)(5).
Response: Schedule TO has been amended to disclose that the term of the MLP continues in perpetuity.
Future Plans—Page 11
Response: Schedule TO has been revised to disclose that neither the MLP nor its affiliates have any current plans to acquire additional units but that additional offers may be made in the future by the MLP in order to provide liquidity to holders of units. Furthermore, except as disclosed in the preceding sentence, the MLP is not making this offer with a view toward, or in connection with, any plan or purpose of acquiring units in a series of successive and periodic offers (whether or not at increasing prices) in order to acquire units over time at the lowest possible price at which unitholders are willing to sell.
Incorporation by Reference, page 10
Response: Financial information contained in reports on Form 10K and Form 10Q has been incorporated by reference. In this connection, we want to point out that it is the policy of the MLP to send copies of all reports on Form 10K and Form 10Q to all unitholders. Accordingly, copies of
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all filings on Form 10K and Form 10Q containing financial information that has been incorporated by reference have previously been mailed to all unitholders. Since the last mailing to unitholders which contained the Form 10Q for the quarter ended September 30, 2004, there have only been 10 transfers by unitholders, all of which involved intra-family transfers which do not count against the annual limitation referred to below. In addition, as disclosed in the Offer to Purchase, there is no established trading market for the units and there is no expectation that one will develop in the future. Furthermore, annual transfers are limited to no more than 1.9% of the outstanding units. Under these circumstances and consistent with the response contained in the Telephone Interpretation, we do not believe that the summary financial information is material so as to require dissemination to unitholders.
Background of the Transaction—Page 14
Response: The disclosure contained in Section 12 of the Offer to Purchase contains a summary of the discounted cash flow methodology used in determining asset valuations. Additional information is also contained in Section 12 as to the methodology used in arriving at a net asset value for units. The offer price is significantly less than the estimate of the net asset value disclosed in Section 12. That fact is prominently disclosed in a number of places in the Offer to Purchase as well as the fact that the offer price is significantly below the net asset value estimated by the MLP's primary lender. In view of the foregoing, we believe that the disclosure guidelines referred to in Release 34-34069 have been satisfied.
Response: The Offer to Purchase discloses (i) the substantial ownership interest held by affiliates of the general partner, (ii) the fact that units held by affiliates of the general partner will not be tendered in the offer, (iii) the amount of the increase in the percentage of units held by affiliates if the offer if fully subscribed and (iv) the continued ability of affiliates of the general partner to control substantially all votes of unitholders following completion of the offer. In order to address the comment, Schedule TO has been amended to add the following disclosure: "Affiliates of the general partner currently own approximately 80.4% of the outstanding units and those units will not be tendered in this offer. Accordingly, the general partner had a conflict of interest in structuring the offer and determining the price to be offered."
We have also enclosed a statement signed by the MLP acknowledging the information referred to in the next to last paragraph of the Staff's comment letter.
Please call either Mark Fisher (212-940-8877) or Elliot Press (212-940-6348) should you have any questions.
Sincerely yours,
/s/ Mark I. Fisher
Mark I. Fisher
MIF:bls
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March 8, 2005
Securities and Exchange Commission
500 North Capital Street
Washington, D.C. 20549
Attention: Daniel F. Duchovny
Gentlemen:
Reference is made to the above-referenced Form TO, as amended ("Form TO"), filed by The Newkirk Master Limited Partnership (the "MLP") with respect to an offer by the MLP to purchase 99,455 units of limited partnership interest in the MLP.
The MLP hereby acknowledges that:
Very truly yours,
THE NEWKIRK MASTER LIMITED PARTNERSHIP
| By: | /s/ PETER BRAVERMAN Peter Braverman Executive Vice President |