================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------------------
SCHEDULE TO
(Rule 14d-100)
Tender Offer Statement under Section 14(d)(1) or 13(e)(1)
of the Securities Exchange Act of 1934
(Amendment No. 2)
--------------------------------
AMERICAN RETIREMENT VILLAS PROPERTIES III, L.P.
(Name of Subject Company (Issuer))
ARVP ACQUISITION, L.P.
ARV ASSISTED LIVING, INC.
(Names of Filing Person (Offeror))
LIMITED PARTNERSHIP UNITS
(Title of Class of Securities)
029317203
(CUSIP Number of Class of Securities)
--------------------------------
Douglas M. Pasquale
Chief Executive Officer
ARVP Acquisition, L.P.
ARV Assisted Living, Inc.
245 Fischer Avenue, Suite D-1
Costa Mesa, CA 92626
(714) 751-7400.
(Name, address, and telephone numbers of person authorized
to receive notices and communications on behalf of filing persons)
With a copy to:
Gary J. Singer, Esq.
O'Melveny & Myers LLP
610 Newport Center Drive
17th Floor
Newport Beach, California 92660
(949) 760-9600
--------------------------------
Calculation of Filing Fee
- --------------------------------------------------------------------------------
Transaction valuation* Amount of filing fee**
$7,466,400 $1,493
- --------------------------------------------------------------------------------
* For purposes of calculating amount of filing fee only. This calculation
assumes the purchase of all of the outstanding limited partnership units of
American Retirement Villas Properties III, L.P. at a net cash purchase price of
$400 per unit. There are 18,666 limited partnership units currently outstanding.
** The amount of the filing fee calculated in accordance with Rule 0-11 of the
Securities Exchange Act of 1934, as amended, equals 1/50th of one percent of the
value of the transaction.
[X] Check the box if any part of the fee is offset as provided by Rule
0-11(a)(2) and identify the filing with which the offsetting fee was
previously paid. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
Amount Previously Paid: $1,493
Form or Registration No.: Schedule TO and Amendment No. 1 to Schedule TO
Filing Party: ARVP Acquisition, L.P. and ARV Assisted Living, Inc.
Date Filed: October 18, 2001 and October 31, 2001
[ ] Check the box if the filing relates solely to preliminary communications
made before the commencement of a tender offer.
Check the appropriate boxes below to designate any transactions to which the
statement relates:
[X] third-party tender offer subject to Rule 14d-1.
[ ] issuer tender offer subject to Rule 13e-4.
[X] going-private transaction subject to Rule 13e-3.
[ ] amendment to Schedule 13D under Rule 13d-2
Check the following box if the filing is a final amendment reporting the results
of the tender offer: [ ]
2
AMENDMENT NO. 2 TO SCHEDULE TO
This Amendment No. 2 amends and supplements the Tender Offer Statement
on Schedule TO ("Schedule TO") filed by ARVP Acquisition, L.P. (the "Purchaser")
and ARV Assisted Living, Inc. the "General Partner" of American Retirement
Villas Properties III, L.P., a California limited partnership (the
"Partnership"), on October 18, 2001, as amended and supplemented on October 31,
2001.
This Amendment No. 2 to the Schedule TO is being filed on behalf of the
Purchaser and the General Partner.
The information set forth in the Offer to Purchase and in the Amendment
and Supplement thereto, including all schedules and annexes thereto, and the
Letter of Transmittal is hereby incorporated by reference herein in answer to
the items of this Schedule TO.
ITEM 1. SUMMARY TERM SHEET.
The information set forth under the question on page 3 of the Offer to
Purchase in the Section entitled "SUMMARY TERM SHEET" is hereby amended in full
to read as follows:
"IF I ACCEPT THE OFFER, WHEN WILL I GET PAID?
- If the conditions to the Offer are satisfied and we consummate
the Offer and accept your Units for payment, you will receive
payment for the Units you tendered promptly following the
expiration of the Offer. See "THE TENDER OFFER--Acceptance For
Payment and Payment.""
ITEM 4. TERMS OF THE TRANSACTION.
(a) Material Terms.
The paragraph on page 19, with the heading "Book Value and Net
Earnings" is hereby amended in full to read as follows:
"If the Offer is consummated and we acquire all of the
outstanding Units, our interest and the interest of the General Partner
in the book value and net earnings of the Partnership will increase to
100%."
The second sentence in the first paragraph under Section 2, "ACCEPTANCE
FOR PAYMENT AND PAYMENT" on page 30 is hereby amended in full to read as
follows:
"Any determination concerning the satisfaction of the terms and
conditions to the Offer shall be within our sole REASONABLE discretion."
The last bullet point under Section 8, "CONDITIONS TO THE OFFER"
on page 35 is hereby amended in full to read as follows:
3
"- any change or prospective change or changes occur or are
threatened that in the JUDGMENT OF A REASONABLE INVESTOR could
materially and adversely affect the business or financial
condition of the Partnership or the value of the Units to us."
The last paragraph under Section 8, "CONDITIONS TO THE OFFER" on page 35
is hereby amended in full to read as follows:
"The foregoing conditions are for our sole benefit and may be
asserted by us in our sole discretion, regardless of the circumstances
(including any action or omission by us) giving rise to any such
conditions or may be waived by us, in our sole discretion, in whole or
in party, at any time PRIOR TO THE EXPIRATION OF THE OFFER. Our failure
at any time to exercise any of the foregoing rights shall not be deemed
a waiver of any such right and each such right shall be deemed an
ongoing right that may be asserted at any time PRIOR TO THE EXPIRATION
OF THE OFFER. Any determination by us concerning any condition or event
described in this section WILL BE SUBJECT TO A STANDARD OF
REASONABLENESS and shall be binding upon all parties."
This Item 4 of the Schedule TO is amended and supplemented to include
the following information:
The Purchaser has elected to provide a subsequent offering period in
connection with its tender offer for Units of the Partnership. The subsequent
offering period will begin on the next business day following the expiration of
the initial offering period and will expire at 5:00 p.m., Eastern Time, on
December 14, 2001, which is the 20th business day following the expiration of
the initial offering period. The initial offering period expired at 12:00
midnight, Eastern Time, on Thursday, November 15, 2001. The Purchaser will
immediately accept for payment all Units validly tendered prior to the
expiration date of the initial offering period. During the subsequent offering
period, the Purchaser will accept and pay for all validly tendered Units when
tendered. The same price paid to unitholders at the conclusion of the initial
offering period will be paid during the subsequent offering period. Units
tendered during the subsequent offering period may not be withdrawn.
(b) Other terms. Except as modified as described above, the terms of the
Offer and other information set forth in the Offer to Purchase, as amended and
supplemented, continue in full force and effect.
ITEM 11. ADDITIONAL INFORMATION.
(b) Other Material Information. Section 7, "FACTORS AFFECTING FUTURE
RESULTS AND FORWARD-LOOKING STATEMENTS" on page 20 is hereby amended to delete
all references to the Private Securities Litigation Reform Act of 1995.
Additionally, the last paragraph of this section is amended by adding the
following language to the end of the paragraph:
"The safe harbor protections provided for under the Private Securities
Litigation Reform Act of 1995 do not extend to a transaction of this
nature. Accordingly, the forward-looking statements in this document are
not protected under such Act."
4
ITEM 12. EXHIBITS.
(a)(1)(G) Press release issued by ARV Assisted Living, Inc. and ARVP
Acquisition, L.P., dated November 15, 2001, announcing the results
of the initial offering period and the election of a subsequent
offering period.
ITEM 13. INFORMATION REQUIRED BY SCHEDULE 13E-3.
Item 4. Terms of the Transactions.
(a) Material Terms.
The second sentence in the first paragraph under Section 2,
"ACCEPTANCE FOR PAYMENT AND PAYMENT" on page 30 is hereby amended in
full to read as follows:
"Any determination concerning the satisfaction of the conditions
to the Offer shall be within our sole REASONABLE discretion."
The last bullet point under Section 8, "CONDITIONS TO THE OFFER" on page
35 is hereby amended in full to read as follows:
"- any change or prospective change or changes occur or are
threatened that in the JUDGMENT OF A REASONABLE INVESTOR could
materially and adversely affect the business or financial
condition of the Partnership or the value of the Units to us."
The last paragraph under Section 8, "CONDITIONS TO THE OFFER" on page 35
is hereby amended in full to read as follows:
"The foregoing conditions are for our sole benefit and may be
asserted by us in our sole discretion, regardless of the circumstances
(including any action or omission by us) giving rise to any such
conditions or may be waived by us, in our sole discretion, in whole or
in party, at any time PRIOR TO THE EXPIRATION OF THE OFFER. Our failure
at any time to exercise any of the foregoing rights shall not be deemed
a waiver of any such right and each such right shall be deemed an
ongoing right that may be asserted at any time PRIOR TO THE EXPIRATION
OF THE OFFER. Any determination by us concerning any condition or event
described in this section will be SUBJECT TO A STANDARD OF
REASONABLENESS and shall be binding upon all parties."
This Item 13 of the Schedule TO is amended and supplemented to include
the following information:
The Purchaser has elected to provide a subsequent offering period in
connection with its tender offer for Units of the Partnership. The subsequent
offering period will begin on the next business day following the expiration of
the initial offering period and will expire at 5:00 p.m., Eastern Time, on
December 14, 2001, which is the 20th business day following the expiration of
the initial offering period. The initial offering period expired at 12:00
midnight, Eastern Time, on Thursday, November 15, 2001. The Purchaser will
immediately accept for payment all Units
5
validly tendered prior to the expiration date of the initial offering period.
During the subsequent offering period, the Purchaser will accept and pay for all
validly tendered Units when tendered. The same price paid to unitholders at the
conclusion of the initial offering period will be paid during the subsequent
offering period. Units tendered during the subsequent offering period may not be
withdrawn.
Item 7. Purposes, Alternatives, Reasons and Effects.
(d) Effects. The paragraph on page 19, with the heading "Book Value
and Net Earnings" is hereby amended in full to read as follows:
"If the Offer is consummated and we acquire all of the outstanding
Units, our interest and the interest of the General Partner in the book value
and net earnings of the Partnership will increase to 100%."
The following language is added to the end of the section entitled
"CERTAIN UNITED STATES INCOME TAX CONSEQUENCES" on page 24 of the Offer to
Purchase.
"Tax Consequences to ARVP Acquisition, L.P. and the General
Partner. We will not recognize any gain or loss for tax purposes as a
result of the acquisition of Units pursuant to the Offer, and will have
a tax basis in the Units equal to the consideration paid for the Units.
With respect to the Units owned by the General Partner, the tax
consequences to the General Partner as a result of our acquisition of
Units pursuant to the Offer will be the same as the tax consequences
described above with respect to unitholders remaining in the Partnership
after such acquisition."
Item 8. Fairness of the Going-Private Transaction.
(a) Fairness. The first three paragraphs in "SPECIAL FACTORS-Fairness
of the Offer" on pages 8 through 9 of the Offer to Purchase are hereby amended
in full to read as follows:
"Because we are wholly-owned by the General Partner, we are an
"affiliate" of the Partnership for purposes of Rule 13e-3 under the
Exchange Act. Accordingly, under Rule 13e-3, we and the General Partner
have considered the fairness of the Offer to THE UNAFFILIATED
UNITHOLDERS OF THE PARTNERSHIP.
We and the General Partner reasonably believe that the Offer is
SUBSTANTIVELY fair to you, AS THE UNAFFILIATED UNITHOLDERS OF THE
PARTNERSHIP. The terms of the Offer, however, were established
unilaterally by the General Partner and were not negotiated with the
Partnership or any representative for the unitholders. EXCEPT AS
FOLLOWS, WE ARE NOT MAKING ANY RECOMMENDATION TO YOU AS TO WHETHER YOU
SHOULD TENDER YOUR UNITS. YOU SHOULD MAKE THAT DECISION ONLY AFTER
CONSULTING WITH YOUR FINANCIAL AND TAX ADVISORS AND CONSIDERING
CAREFULLY THE INFORMATION SET FORTH IN THIS OFFER. However, if you
intend to tender Units in the C3 Capital Offer, we recommend that you
tender your Units to us instead, since the terms and conditions of our
Offer are superior to the C3 Capital Offer.
6
In reaching its determination that the Offer is SUBSTANTIVELY
fair to the unaffiliated unitholders, WE AND the General Partner
considered the following factors:"
(b) Factors Considered in Determining Fairness. The following
disclosure is in addition to the information set forth in "SPECIAL
FACTORS--Fairness of the Offer" on page 9 of the Offer to Purchase and is added
as the seventh and eighth bullet points.
"- We and the General Partner do not believe that book value of the
Units is relevant to the fairness of the Offer. We believe that
the book value far understates the true value of the Partnership
and its assets, in part because they have been depreciated for
accounting statement purposes. For example, the book value per
Unit as of June 30, 2001 was approximately $106 compared to the
original and increased offer prices of $360 and $400,
respectively. Accordingly, we did not consider book value in
determining the fairness of the Offer.
- We and the General Partner do not believe that going concern
value is relevant to the fairness of the Offer. The Partnership
is not in a true sense an operating business. Its only assets,
other than cash, are the two Partnership Properties, which are
managed by the General Partner. Because going concern value
typically reflects independent value for the goodwill of the
business as a going concern, over and above its asset values,
those factors are not present here. Accordingly, we did not
consider going concern value in determining the fairness of the
Offer."
The following language is added to the end of the second bullet point on
page 9:
"In determining the liquidation value of the Partnership, we and the
General Partner relied primarily on the General Partner's own analysis.
We believe that the General Partner is in the best position to determine
the value of the Partnership's assets. While the General Partner simply
took into account the independent appraisals of the Properties, as well
as other offers received from independent third parties, in its own
analysis, it did not separately rely upon any such appraisals."
The following amends in full the last sentence on page 9 regarding the
procedural fairness of the Offer:
"DUE TO THE NATURE OF THE TRANSACTION, THE APPROVAL OF THE
MAJORITY OF THE UNAFFILIATED UNITHOLDERS IS NOT REQUIRED FOR US TO
COMPLETE THE OFFER. THE PARTNERSHIP AS AN ENTITY DOES NOT HAVE A BOARD
OF DIRECTORS, AND THE GENERAL PARTNER IS THE ONLY ENTITY OR PERSON
ACTING ON ITS BEHALF. FURTHERMORE, AS NOTED ABOVE IN ITEM 1 OF "RISK
FACTORS," NO INDEPENDENT COMMITTEE OR REPRESENTATIVE HAS BEEN APPOINTED
OR RETAINED TO NEGOTIATE THE TERMS OF THE OFFER ON YOUR BEHALF. DESPITE
THE FACT THAT THESE PROCEDURAL SAFEGUARDS ARE LACKING, WE AND the
General Partner reasonably believe that the Offer is procedurally fair
to you in light of the following factors:"
The last sentence of Section 4, "FAIRNESS OF THE OFFER," on page 10 of
the Offer to Purchase, is hereby amended in full to read as follows:
7
"In determining that the Offer is fair to the UNAFFILIATED unitholders
of the Partnership, we AND THE GENERAL PARTNER considered the above factors as a
whole and did not assign specific or relative weights to them. All beliefs as to
the fairness of the Offer attributed to the General Partner also apply to us."
8
SIGNATURE
After due inquiry and to the best of their knowledge and belief, the
undersigned hereby certify as of November 16, 2001 that the information set
forth in this statement is true, complete and correct.
ARVP ACQUISITION, L.P.
By: ARV ASSISTED LIVING, INC.
as General Partner
By: /s/ DOUGLAS M. PASQUALE
------------------------------------
Name: Douglas M. Pasquale
Title: Chairman and Chief Executive
Officer
ARV ASSISTED LIVING, INC.
By: /s/ DOUGLAS M. PASQUALE
------------------------------------
Name: Douglas M. Pasquale
Title: Chairman and Chief Executive
Officer
9
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
- ----------- -----------
(a)(1)(G) Press release issued by ARV Assisted Living, Inc. and ARVP
Acquisition, L.P., dated November 15, 2001, announcing the
results of the initial offering period and the election of a
subsequent offering period.
10