SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
SCHEDULE TO/A
(AMENDMENT NO. 1)
TENDER OFFER STATEMENT UNDER SECTION 14(D)(1) OR 13(E)(1) OF THE SECURITIES
EXCHANGE ACT OF 1934
Angeles Partners XI
- -------------------------------------------------------------------------------
(Name of Subject Company (Issuer))
AIMCO Properties, L.P.
Apartment Investment and Management Company
AIMCO-GP, Inc.
Angeles Realty Corporation II
- -------------------------------------------------------------------------------
(Names of Filing Persons -- Offerors)
Limited Partnership Units
- -------------------------------------------------------------------------------
(Title of Class Securities)
None
- -------------------------------------------------------------------------------
(CUSIP Number of Class Securities)
Martha L. Long
Apartment Investment and Management Company
55 Beattie Place
P.O. Box 1089
Greenville, South Carolina 29602
(864) 239-1000
- -------------------------------------------------------------------------------
(Name, address, and telephone numbers of person authorized to receive
notices and communications on behalf of filing persons)
Copy to:
Joseph A. Coco
Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square New York, New York 10036
(212) 735-3000
and
Jonathan L. Friedman
Skadden, Arps, Slate, Meagher & Flom LLP
300 South Grand Avenue
Los Angeles, California 90071
(213) 687-5000
Calculation of Filing Fee
TRANSACTION VALUATION* AMOUNT OF FILING FEE
---------------------- --------------------
$ 4,915,767.60 $ 622.83
* For purposes of calculating the fee only. This amount assumes the
purchase of 13,672 units of limited partnership interest of the subject
partnership for $359.55 per unit. The amount of the filing fee,
calculated in accordance with Section 14(g)(1)(B)(3) and Rule 0-11(d)
under the Securities Exchange Act of 1934, as amended, equals $126.70
per million of the aggregate amount of cash offered by the bidder.
[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: $622.83 Filing Party: AIMCO Properties,
L.P.
Form or Registration No.: Schedule TO/13E-3 Date Filed: November 4, 2004
[ ] 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. 1 TO SCHEDULE TO
This Amendment No. 1 amends and supplements the Tender Offer Statement
and Rule 13e-3 Transaction Statement on Schedule TO initially filed on November
4, 2004 (the "Schedule TO"). This Amendment No. 1 relates to the offer by AIMCO
Properties, L.P., a Delaware limited partnership, to purchase units of limited
partnership interest ("Units") of Angeles Partners XI, a California limited
partnership (the "Partnership"), at a price of $359.55 per unit in cash, subject
to the conditions set forth in the Litigation Settlement Offer dated November 4,
2004 and in the related Letter of Transmittal (which, together with any
supplements or amendments, collectively constitute the "Offer"). Copies of the
Litigation Settlement Offer and the Letter of Transmittal are filed with the
Schedule TO as Exhibits (a)(1) and (a)(2), respectively. The item numbers and
responses thereto below are in accordance with the requirements of Schedule TO,
and all section and page references are to the Litigation Settlement Offer.
Unless defined herein, capitalized terms used and not otherwise defined herein
have the respective meanings ascribed to such terms in the Litigation Settlement
Offer.
On December 1, 2004, AIMCO Properties, L.P. issued a press release
announcing the extension of the expiration date of the Offer from midnight, New
York City time, on December 6, 2004 to midnight, New York City time, on December
15, 2004. A copy of that press release has been filed as Exhibit (a)(4) to this
Amendment No. 1.
ITEM 1. SUMMARY TERM SHEET.
The information incorporated by reference into Item 1 of the Schedule
TO is amended and supplemented as follows:
(1) The first paragraph of the second bullet point beginning with "The
Settlement Fund" under "SUMMARY TERM SHEET" on page 1 is amended by
adding the following sentence to the end thereof:
"In addition, if you requested exclusion from the settlement but tender
your units, by signing the letter of transmittal, you will release us
from claims that you would otherwise have preserved by requesting
exclusion from the settlement class. If you did not request exclusion,
you will release any known or unknown claims arising out of the class
and derivative litigation if the judgment approving the settlement is
affirmed on appeal. By executing the enclosed letter of transmittal,
moreover, you will release those claims even if the judgment is
reversed or otherwise vacated on appeal. See "-Release and Assignment
of Future Claims" below."
ITEM 4. TERMS OF THE TRANSACTION.
The information incorporated by reference into Item 4(a) of the
Schedule TO is amended and supplemented as follows:
(1) The third bullet point on the front cover of the Litigation
Settlement Offer is amended by replacing the second sentence with the
following:
"We determined our offer price by estimating a net equity value for
your partnership units based on a gross property value of $57,000,000
(equal to 95% of the value determined by the independent appraisal in
2003), reduced by an estimated prepayment penalty of $5,705,699,
resulting in a net property value of $51,294,301.
(2) The fourth risk factor entitled, "OUR OFFER PRICE MAY NOT REFLECT
THE FAIR VALUE OF YOUR PARTNERSHIP'S PROPERTY" under "RISK FACTORS" on
page 5 is amended by replacing the first sentence with the following:
"We determined our offer price by estimating a net equity value for
your partnership units based on a gross property value of $57,000,000
(equal to 95% of the value determined by the independent appraisal in
2003), reduced by an estimated prepayment penalty of $5,705,699,
resulting in a net property value of $51,294,301.
(3) The risk factor entitled, "WE COULD DELAY ACCEPTANCE OF, AND
PAYMENT FOR, YOUR UNITS" under "RISK FACTORS" on page 8 is amended by
adding the following to the end thereof:
3
"We will pay for or return tendered units promptly after expiration of
the offer."
(4) "Section 6. Material Federal Income Tax Matters" is amended by
adding the following to the end thereof on page 18:
"Tax Consequences to the General Partner of Your Partnership
and its Affiliates, including AIMCO Properties, L.P. The sale of your
units pursuant to this offer will not be a taxable transaction for the
general partner of your partnership or its affiliates, including AIMCO
Properties, L.P. Consequently, the general partner of your partnership
and its affiliates will not recognize gain or loss in connection with
this offer. We intend to treat the entire offer price as consideration
paid to you for your units, regardless of whether you requested
exclusion from the settlement. We, like any other purchaser of units,
will receive a tax basis in the purchased units equal to the
consideration paid by us for the units. This tax basis will be
allocated over the assets owned by your partnership, and we will be
able to take depreciation and amortization deductions to the extent
basis is allocated to depreciable or amortizable property owned by your
partnership."
(5) "Section 7. Effects of the Offer" is amended by adding the
following before the paragraph entitled "Accounting Treatment" on page
19:
"Costs Associated with Being a Public Company. There are
various costs associated with being a public company, including costs
associated with preparing, auditing and filing our periodic reports
with the SEC. We estimate these expenses to be approximately $32,000
per year. This represents approximately 6.8% of the partnership's
general and administrative expenses and 0.39% of the partnership's
total expenses (based on 2003 expenses of approximately $466,000 and
$8,277,000, respectively). In addition, as a result of the
Sarbanes-Oxley Act of 2002, we estimate our costs will increase by
approximately 10% beginning in 2005. If the partnership were to
terminate its registration under the Exchange Act, the estimated cost
savings would be approximately $32,000 per year."
(6) The section entitled "Determination of Offer Price" under "Section
8. Valuation of Units" beginning on page 19 up to, but not including,
the table on page 20 immediately preceding the section entitled
"Comparison of Offer Price to Alternative Consideration" is amended
and restated as follows:
"Determination of Offer Price. We determined our offer price
by estimating the liquidation proceeds that would be payable to limited
partners if calculating a net equity value of units of limited
partnership interest based on a valuation of your partnership's
property. Our starting point in this process was the value of your
partnership's property as determined by the court-appointed,
independent appraiser in 2003. For a more a detailed description of the
independent appraisal of your partnership's property, see "The
Litigation Settlement Offer -- Section 8. Valuation of Units; Estimated
Liquidation Proceeds Based on Independent Appraisal."
For Fox Run Apartments, we assigned it a gross property value
of $57,000,000, which is equal to 95% of its appraised value. We made
this determination based on certain factors, including the following:
- property net operating income for the six months ended June
30, 2004 annualized was $4.878 million, as compared to a
projected annual run rate of $5.074 million by the appraiser;
and
- the property's vacancy rate for the month ended July 2004
was 7% and its loss rate was 13%, as compared to a vacancy and
loss rate of 5% projected by the appraiser.
We then deducted from the gross property value of Fox Run
Apartments an estimated prepayment penalty of $5,705,699 to determine
its net property value. The following table compares the appraised
value of your partnership's property to the net property value that we
used to determine our offer price:
<Table>
<Caption>
GROSS PREPAYMENT NET
PROPERTY APPRAISED VALUE PROPERTY VALUE PENALTY PROPERTY VALUE
------------------------ --------------- -------------- ------------ --------------
Fox Run Apartments . . . $ 60,000,000 $ 57,000,000 $ 5,705,699 $ 51,294,301
</Table>
After determining the net property value, we then calculated
an equity value for your partnership based on such net property value
by adding the value of the non-real estate assets of your partnership
and deducting its liabilities, including mortgage debt and debt owed by
your partnership to the general partner or its affiliates.
Finally, we allocated 99% of this net equity value to limited
partners, which is the percentage of net proceeds that would be paid to
limited partners in the event of a liquidation of your partnership. Our
offer price represents the net equity value per unit determined in this
manner, plus a pro rata portion of the settlement fund, as indicated
below."
(7) The first line of the table on page 20 immediately preceding
the section entitled "Comparison of Offer Price to Alternative
Consideration" under "Section 8. Valuation of Units - Determination of
Offer Price" is amended by replacing "Aggregate gross property value of
partnership property" with "Net property value of partnership
property".
4
(8) "Section 8. Valuation of Units - Estimated Liquidation Proceeds
Based on Independent Appraisal" on page 22 is amended by replacing the
first paragraph with the following:
"Selection and Qualifications of Independent Appraiser. Your
partnership's property was appraised by American Appraisal Associates,
Inc. ("AAA"), an independent appraiser appointed by the court. Under
the terms of the settlement, the independent appraiser was required to
provide in writing its professional opinion as to the market value of
each of the partnership's properties as of the date of the delivery of
the written appraisal, describing the methodologies used and other
information which the appraiser deemed appropriate to support or
explain its work. The appraiser was also required to prepare an
executive summary of each appraisal that included all material
information. As the appraiser was court-appointed, no special valuation
instructions were given to the appraiser by the partnership, us or our
affiliates. The information set forth below was provided to us by AAA
with respect to its appraisals."
(9) The paragraph entitled, "Summary of Independent Appraisals of Your
Partnership's Property" on page 24 under "Section 8. Valuation of Units
- Estimated Liquidation Proceeds Based on Independent Appraisal" is
amended by replacing the last sentence with the following:
"The estimated total "as is" market value of the fee simple
estate of your partnership's property is $60,000,000, which is higher
than the net property value of $51,294,301 as estimated by us."
(10) The first bullet point of the paragraph entitled, "Factors Not in
Favor of Fairness Determination" on page 39 under "Section 12. Position
of the General Partner of Your Partnership with Respect to the Offer"
is amended by replacing the first sentence with the following:
"we determined our offer price by estimating a net equity value for
your partnership units based on a gross property value of $57,000,000
(equal to 95% of the 2003 value determined by American Appraisal
Associates, Inc., an independent appraiser appointed by the Court),
reduced by an estimated prepayment penalty of $5,705,699, resulting in
a net property value of $51,294,301."
(11) The second bullet point on page 48 under "Section 19. Conditions
to the Offer" is amended by replacing items "(v)" through "(vii)" with
the following:
"(v) any limitation (whether or not mandatory) by any governmental
authority on, or any other material event which, in either case, could
reasonably be expected to affect the extension of credit by banks or
other lending institutions, or (vi) in the case of any of the foregoing
existing at the time of the commencement of the offer, a material
acceleration or worsening thereof; or"
(12) The first sentence of the last paragraph on page 49 under "Section
19. Conditions to the Offer" is amended by replacing the first sentence
with the following:
"The foregoing conditions are for our sole benefit and may be
asserted by us regardless of the circumstances (other than
circumstances arising out of actions or inactions by us or our
affiliates) giving rise to such conditions or may be waived by us at
any time in our reasonable discretion prior to the expiration of this
offer."
5
ITEM 12. EXHIBITS.
Item 12 of the Schedule TO is amended and supplemented as follows:
(a)(4) Press Release dated December 1, 2004.
6
ITEM 13. INFORMATION REQUIRED BY SCHEDULE 13E-3.
ITEM 7. PURPOSES, ALTERNATIVES, REASONS AND EFFECTS.
The information incorporated by reference into Item 7(d) of
Item 13 of the Schedule TO is amended and supplemented as follows:
(1) "Section 6. Material Federal Income Tax Matters" is
amended by adding the following to the end thereof on page 18:
"Tax Consequences to the General Partner of Your
Partnership and its Affiliates, including AIMCO Properties,
L.P. The sale of your units pursuant to this offer will not be
a taxable transaction for the general partner of your
partnership or its affiliates, including AIMCO Properties,
L.P. Consequently, the general partner of your partnership and
its affiliates will not recognize gain or loss in connection
with this offer. We intend to treat the entire offer price as
consideration paid to you for your units, regardless of
whether you requested exclusion from the settlement. We, like
any other purchaser of units, will receive a tax basis in the
purchased units equal to the consideration paid by us for the
units. This tax basis will be allocated over the assets owned
by your partnership, and we will be able to take depreciation
and amortization deductions to the extent basis is allocated
to depreciable or amortizable property owned by your
partnership."
(2) "Section 7. Effects of the Offer" is amended by adding the
following before the paragraph entitled "Accounting Treatment"
on page 19:
"Costs Associated with Being a Public Company.
There are various costs associated with being a public
company, including costs associated with preparing, auditing
and filing our periodic reports with the SEC. We estimate
these expenses to be approximately $32,000 per year. This
represents approximately 6.8% of the partnership's general and
administrative expenses and 0.39% of the partnership's total
expenses (based on 2003 expenses of approximately $466,000 and
$8,277,000, respectively). In addition, as a result of the
Sarbanes-Oxley Act of 2002, we estimate our costs will
increase by approximately 10% beginning in 2005. If the
partnership were to terminate its registration under the
Exchange Act, the estimated cost savings would be
approximately $32,000 per year."
7
ITEM 8. FAIRNESS OF THE TRANSACTION.
The information incorporated by reference into Item 8(a)-(f)
of Item 13 of the Schedule TO is amended and supplemented as follows:
(1) The first bullet point of the paragraph entitled, "Factors
Not in Favor of Fairness Determination" on page 41 under
"Section 12. Position of the General Partner of Your
Partnership with Respect to the Offer" is amended by replacing
the first sentence with the following:
"we determined our offer price by estimating a net equity
value for your partnership units based on gross property value
of $57,000,000 (equal to 95% of the 2003 value determined by
American Appraisal Associates, Inc., an independent appraiser
appointed by the Court), reduced by an estimated prepayment
penalty of $5,705,699, resulting in net property value of
$51,294,301."
ITEM 9. REPORTS, OPINIONS, APPRAISALS AND NEGOTIATIONS.
The information incorporated by reference into Item 9(b) of
Item 13 of the Schedule TO is amended and supplemented as follows:
(1) "Section 8. Valuation of Units - Estimated Liquidation
Proceeds Based on Independent Appraisal" on page 22 is amended
by replacing the first paragraph with the following:
"Selection and Qualifications of Independent
Appraiser. Your partnership's property was appraised by
American Appraisal Associates, Inc. ("AAA"), an independent
appraiser appointed by the court. Under the terms of the
settlement, the independent appraiser was required to provide
in writing its professional opinion as to the market value of
your partnership's property as of the date of the delivery of
the written appraisal, describing the methodologies used and
other information which the appraiser deemed appropriate to
support or explain its work. The appraiser was also required
to prepare an executive summary of each appraisal that
included all material information. As the appraiser was
court-appointed, no special valuation instructions were given
to the appraiser by the partnership, us or our affiliates. The
information set forth below was provided to us by AAA with
respect to its appraisals."
(2) The paragraph entitled, "Summary of Independent Appraisals
of Your Partnership's Property" on page 24 under "Section 8.
Valuation of Units - Estimated Liquidation Proceeds Based on
Independent Appraisal" is amended by replacing the last
sentence with the following:
"The estimated total "as is" market value of the fee simple
estate of your partnership's property is $60,000,000, which is
higher than the net property value of $51,294,301 as estimated
by us."
8
SIGNATURE
After due inquiry and to the best of its knowledge and belief, the
undersigned hereby certify that the information set forth in this statement is
true, complete and correct.
Date: December 1, 2004
AIMCO PROPERTIES, L.P.
By: AIMCO-GP, INC.
Its General Partner
By: /s/ MARTHA L. LONG
----------------------------------
Martha L. Long
Senior Vice President
APARTMENT INVESTMENT AND
MANAGEMENT COMPANY
By: /s/ MARTHA L. LONG
----------------------------------
Martha L. Long
Senior Vice President
AIMCO-GP, INC.
By: /s/ MARTHA L. LONG
----------------------------------
Martha L. Long
Senior Vice President
ANGELES REALTY CORPORATION II
By: /s/ MARTHA L. LONG
----------------------------------
Martha L. Long
Senior Vice President
9
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
- ----------- ----------------------------------------------------------------
(a)(4) Press release dated December 1, 2004.
10