Exhibit (a)(1)-7
Supplement No. 1 to
OFFER TO PURCHASE FOR CASH
UP T0 79,917 UNITS OF LIMITED PARTNERSHIP INTERESTS
OF
WESTIN HOTELS LIMITED PARTNERSHIP
AT
$550 PER UNIT
BY
KALMIA INVESTORS, LLC
MERCED Partners Limited Partnership
Smithtown Bay, LLC
Global Capital Management, Inc.
John D. Brandenborg
Michael J. Frey
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THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT
5:00 P.M., EASTERN TIME, ON AUGUST 29, 2003,
UNLESS THE OFFER IS FURTHER EXTENDED.
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This Supplement No. 1 to Offer to Purchase amends and is supplemental to that
certain offer to purchase dated July 24, 2003 (the "Offer to Purchase"), by
Kalmia Investors, LLC, a Delaware limited liability company (the "Purchaser"),
pursuant to which the Purchaser offered to purchase up to 79,917 units of
limited partnership interest ("Units") in Westin Hotels Limited Partnership, a
Delaware limited partnership (the "Partnership"), at a purchase price of $550
per Unit, in cash, without interest, less the amount of any distributions
declared or paid on or after July 7, 2003 in respect of that Unit (the "Purchase
Price"). All terms used herein as defined terms and not otherwise defined have
the meaning ascribed to them in the Offer to Purchase.
The following amendments have been made to the Offer to Purchase
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o We have added Merced Partners Limited Partnership, Smithtown Bay, LLC,
Global Capital Management, Inc., John D. Brandenborg and Michael J. Frey as
Offerors. These parties directly and indirectly control the Purchaser.
o THE OFFER HAS BEEN EXTENDED TO AUGUST 29, 2003.
o AS OF JULY 29, 2003, THE OFFER IS NO LONGER CONDITIONED UPON THE VALID
TENDER OF AT LEAST 58,200 UNITS. THIS MEANS THAT THE OFFER IS NOT SUBJECT
TO A CONDITION THAT ANY MINIMUM NUMBER OF UNITS BE TENDERED.
o Accordingly, this is no longer the most significant condition. However, the
Offer remains conditioned on, among other things, the Purchaser having
confirmed to its reasonable satisfaction that, upon the purchase of the
Units pursuant to the Offer, the General Partner will give its prior
written consent to the Purchaser becoming a Substituted Limited Partner
with respect to all Units tendered (although the Purchaser reserves the
right to waive this condition).
o The Offer to Purchase now states that the satisfaction of all conditions,
other than consents, orders or approvals of, or declarations or filings
with, or expirations of waiting periods imposed by, any court,
administrative agency or commission or other governmental authority or
instrumentality, domestic or foreign, will be determined as at the
Expiration Date, subject to the Purchaser's right to extend the Offer.
o The Offer to Purchase has been clarified to confirm that the Purchaser does
not consider the offer made by Windy City Investments, LLC and certain
other bidders pursuant to its tender offer dated July 7, 2003, as amended
on July 29, 2003, to have triggered condition (f) in Section 13 of the
Offer to Purchase.
o WE HAVE REMOVED OUR ABILITY TO TERMINATE THE OFFER AT ANY TIME FOR ANY
REASON OR FOR NO REASON. WE MAY STILL TERMINATE THE OFFER IF ANY OF OUR
CONDITIONS ARE NOT MET ON OR PRIOR TO THE EXPIRATION DATE.
o We have not yet determined how we would vote our Units with regard to a
refinancing, nor have we determined what factors we will use to make such
decision. The Offer to Purchase now notes that in its Schedule 14D-9 dated
July 18, 2003, the Partnership has stated that the General Partner has had
discussions with potential lenders with a goal of presenting a refinancing
proposal to the limited partners later this year. The Partnership adds
that, "at this time and subject to today's dynamic lending environment, the
General Partner is not optimistic it will be able to find a lender willing
to provide financing to the Partnership upon terms set forth in the
Preliminary Proxy Statement."
o The Offer to Purchase now states that the transfer of Units is subject to
the requirements of Section 11.01 of the Limited Partnership Agreement
which states that the General Partner may suspend transfers if and when any
such transfer would result in the transfer of 40% or more of the Units in
the Partnership when added to the total of all other sales or exchanges of
Units within the preceding 12 months. If the General Partner suspends
transfers to us because we have exceeded the 40% transfer limit, we may
reduce the number of Units we are tendering for in order to lift that
suspension and subject tendering Unitholders to a pro rata reduction of
Units that we will accept for payment.
o The Offer to Purchase now states that Smithtown Bay, LLC, the Managing
Member of the Purchaser, succeeded the previous Managing Member on January
3, 2003. As none of the Offerors are affiliated with the previous Managing
Member of the Purchaser, they do not know whether the previous Managing
Member of the Purchaser had negotiations or material discussions with the
General Partner within the past 2 years.
We have included additional information for you to consider with respect to the
Offer
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ADDITIONAL RISKS AND FACTORS TO CONSIDER BEFORE TENDERING
Our ability to control Partnership decisions if we become majority Unitholder of
the Partnership
While the Offer is no longer conditioned on the tender of a minimum number of
Units, it is possible that, as a result of the Offer, that the Purchaser could
become the holder of a majority of the Units in the Partnership. As a majority
holder, the Purchaser would have the right under the Partnership Agreement by
majority vote to:
o Amend certain provisions of the Partnership Agreement;
o Approve certain sales or borrowings by the Partnership;
o Approve the transfer of the General Partner's interest;
o Expel the General Partner or any successor General Partner with or without
cause;
o Elect a new General Partner or General Partners upon the adjudication of
incompetency, expulsion, withdrawal, death or dissolution of the General
Partner or any successor General Partner;
o Expel a general partner of a Hotel Partnership, with or without cause in
accordance with the terms of the agreement of limited partnership of such
Hotel Partnership; and
o Elect to dissolve the Partnership.
As the Offer to Purchase states, the Purchaser has no current plans or proposals
that would result in an extraordinary corporate transaction, such as a merger,
reorganization or liquidation involving the Partnership, the sale or transfer of
any material amount of assets of the Partnership, any material change in the
capitalization or dividend policy of the Partnership or any other material
change in the Partnership's company structure or business.
The Purchaser has not engaged a Depositary for the Offer.
The Purchaser will submit tendered Units that it accepts for payment to the
Partnership's transfer agent. The Purchaser will hold the funds necessary to pay
Unitholders for purchased Units upon transfer of the Units to the Purchaser. The
Purchaser has not engaged a Depositary to minimize the costs of the Offer. While
the Purchaser has substantial experience in affecting the transfer of limited
partnership interests, because the Purchaser has not engaged a Depositary, there
will be no independent third party holding funds of the Purchaser to pay
Unitholders for Units that will be purchased in the Offer, or to verify
independently that such funds are indeed available. Also, payments to tendering
Unitholders may be delayed if the Purchaser were to suffer an event of
bankruptcy or other material adverse event prior to its making the payments. The
Purchaser does not believe that the absence of a Depositary will affect or delay
the effectuation of Unit transfers resulting from the Offer.
Additional Financial Information Concerning the Purchaser
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The Offer to Purchase now states that we will pay cash for all tendered Units
using our cash on hand and proceeds from highly liquid securities in our
proprietary portfolio. The Purchaser is not a public company. The Offer is not
contingent on obtaining financing. Set forth below is a summary of certain
financial information with respect to Merced, the sole owner of all of the
members of the Purchaser, from its most recent unaudited financial statement
dated June 30, 2003. Attached as Exhibit (a)(1)-8 to the Schedule TO are copies
of Merced's unaudited financial statements for the years ended December 31, 2002
and 2001, and Merced's unaudited balance sheets as of June 30, 2003 and March
31, 2003.
June 30, 2003 (Unaudited)
ASSETS
Cash and cash equivalents $ 55,427,432
Accounts receivable 269,292,553
Securities owned, at fair value 577,417,239
Other assets 229,455
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Total Assets $ 902,366,679
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LIABILITIES AND PARTNERS' CAPITAL
Securities sold but not yet purchased, at fair value $ 270,916,146
Accounts payable and other liabilities 18,719,435
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Total Liabilities $ 289,635,581
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Partners' capital $ 612,731,098
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Total Liabilities and Partners' Capital $ 902,366,679
============
Miscellaneous
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THE OFFER IS NOT BEING MADE TO (NOR WILL TENDERS BE ACCEPTED FROM OR ON BEHALF
OF) UNITHOLDERS IN ANY JURISDICTION IN WHICH THE MAKING OF THE OFFER OR THE
ACCEPTANCE THEREOF WOULD NOT BE IN COMPLIANCE WITH THE LAWS OF SUCH
JURISDICTION. THE PURCHASER IS NOT AWARE OF ANY JURISDICTION WITHIN THE UNITED
STATES IN WHICH THE MAKING OF THE OFFER OR THE ACCEPTANCE THEREOF WOULD BE
ILLEGAL.
In any jurisdiction where the securities, blue sky or other laws require the
Offer to be made by a licensed broker or dealer, the Purchaser will engage one
or more registered brokers or dealers that are licensed under the laws of such
jurisdiction to make the Offer. The Purchaser has filed with the Commission the
Schedule TO, together with exhibits, pursuant to Rule 14d-3 of the General Rules
and Regulations under the Exchange Act, furnishing certain information with
respect to the Offer, and may file amendments thereto. Such Schedule TO and any
amendments thereto, including exhibits, may be examined and copies may be
obtained from the Commission as set forth above.
No person has been authorized to give any information or to make any
representation on behalf of the Purchaser not contained in the Offer to Purchase
or in the Agreement of Sale and, if given or made, any such information or
representation must not be relied upon as having been authorized. Neither the
delivery of the Offer to Purchase nor any purchase pursuant to the Offer shall,
under any circumstances, create any implication that there has been no change in
the affairs of the Purchaser or the Partnership since the date as of which
information is furnished or the date of this Offer to Purchase.
Dated: August 4, 2003
KALMIA INVESTORS, LLC
By: Smithtown Bay, LLC
Its Manager
By: Global Capital Management, Inc.
Its Manager
By: /s/ Michael J. Frey
---------------------
Name: Michael J. Frey
Title: Chief Executive Officer
SMITHTOWN BAY, LLC
By: Global Capital Management, Inc.
Its Manager
By: /s/ Michael J. Frey
---------------------
Name: Michael J. Frey
Title: Chief Executive Officer
MERCED PARTNERS LIMITED
PARTNERSHIP
By: /s/ Michael J. Frey
---------------------
Name: Michael J. Frey
Title: Chief Executive Officer
GLOBAL CAPITAL MANAGEMENT, INC.
By: /s/ Michael J. Frey
---------------------
Name: Michael J. Frey
Title: Chief Executive Officer
MICHAEL J. FREY
By: /s/ Michael J. Frey
-------------------
JOHN D. BRANDENBORG
By: /s/ John D. Brandenborg
-----------------------
The Agreement of Sale and any other required documents should be sent or
delivered in the pre-addressed envelope that accompanied the Offer to Purchase
that we sent to you on July 24, 2003, by each tendering Unitholder or its
broker, dealer, commercial bank, credit union, trust company or other nominee to
the Purchaser at the following address:
KALMIA INVESTORS, LLC
601 Carlson Parkway, Suite 200
Minnetonka, MN 55305
FOR MORE INFORMATION, FOR FURTHER ASSISTANCE WITH THE PROCEDURE OF TENDERING
YOUR UNITS OR FOR A COMPLETE COPY OF THE AMENDED OFFER TO PURCHASE, PLEASE CALL
THE PURCHASER'S TOLL-FREE INFORMATION LINE AT (800) 547-0854. YOU CAN ALSO FIND
A COMPLETE COPY OF THE AMENDED OFFER TO PURCHASE ON THE SEC WEBSITE
(WWW.SEC.GOV).