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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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SCHEDULE 14D-9
SOLICITATION/RECOMMENDATION STATEMENT UNDER SECTION 14(d)(4)
OF THE SECURITIES EXCHANGE ACT OF 1934
BOSTON CAPITAL TAX CREDIT FUND III L.P.
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(Name of Subject Company)
BOSTON CAPITAL TAX CREDIT FUND III L.P.
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(Name of Person(s) Filing Statement)
BENEFICIAL ASSIGNEE CERTIFICATES
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(Title of Class of Securities)
NONE
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(CUSIP Number of Class of Securities)
c/o Erica Blake
Boston Capital Corporation
One Boston Place, Suite 2100
Boston, MA 02108
(617) 624-8900
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(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications on Behalf of the Person(s) Filing Statement)
[ ] Check the box if the filing relates solely to preliminary communications
made before the commencement of a tender offer.
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SCHEDULE 14D-9
ITEM 1. SUBJECT COMPANY INFORMATION.
The name of the subject company is Boston Capital Tax Credit Fund III L.P.,
a Delaware limited partnership (the "Partnership"). The address of the principal
executive offices of the Partnership is One Boston Place, Suite 2100, Boston, MA
02108, and its telephone number is (617) 624-8900. The General Partner of the
Partnership is Boston Capital Associates III L.P., a Delaware limited
partnership (the "General Partner"), which has its principal executive offices
at One Boston Place, Suite 2100, Boston, MA 02108. The telephone number of the
General Partner is 617-624-8900.
The title of the class of equity securities to which this Schedule 14D-9
relates is the Series 19 Beneficial Assignee Certificates ("BACs") which
evidence the beneficial interest of an assignee in the Series 19 limited
partnership interests of the Partnership. As of February 1, 2006, approximately
4,080,000 BACs were outstanding, held by approximately 2,380 investors.
ITEM 2. IDENTITY AND BACKGROUND OF FILING PERSON.
This Schedule 14D-9 is being filed by the Partnership, the subject company.
The Partnership's general partner is Boston Capital Associates III L.P., a
Delaware limited partnership (the "General Partner"). The business address of
the Partnership and of the General Partner is One Boston Place, Suite 2100,
Boston, MA 02108.
This Schedule 14D-9 relates to a tender offer by Paco Development, L.L.C.
(the "Offeror") to purchase up to 770,000 Series 19 BACs of the Partnership, in
cash, at a price of $1.00 per BAC, without interest, less the amount of any
distributions per BAC made by the Partnership to the BAC holders after the date
of the offer and less any transfer fees charged by the Partnership (the "Paco
Offer"). The offer to purchase the BACs is being made pursuant to an Offer to
Purchase and a related Agreement of Transfer and Letter of Transmittal. The
tender offer is described in a Tender Offer Statement on Schedule TO, dated
January 27, 2006, which was filed with the SEC on February 7, 2006. As set forth
in the Offer to Purchase incorporated by reference into the Schedule TO (the
"Offer to Purchase"), the principal business address of the Offeror is PO Box
34729, North Kansas City, Missouri 64116.
ITEM 3. PAST CONTACTS, TRANSACTIONS, NEGOTIATIONS AND AGREEMENTS.
To the knowledge of the Partnership, there are no material agreements,
arrangements or understandings or any potential conflicts of interest between
the Partnership, its executive officers, directors or affiliates and the
Offeror, its executive officers, directors or affiliates.
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ITEM 4. THE SOLICITATION OR RECOMMENDATION.
The General Partner is recommending against tendering BACs with respect to
the Paco Offer and believes that BAC holders should carefully consider, with the
assistance of their financial advisors, the following factors in making their
own decision about whether to accept or reject the Paco Offer:
- BAC holders who tender their BACs will lose the right to receive any
future distributions from the Partnership, including distributions
from any refinancing or sale of the Partnership's properties, although
there can be no assurance as to the timing, amount or occurrence of
any future distributions.
- BAC holders who tender their BACs will forego the benefit of any
future income and loss allocations from the Partnership with respect
to such BACs.
- If the BAC holder does not tender BACs and he/she has losses that have
not yet been used to offset passive income, these losses would
continue to accrue to the BAC holder and therefore would not be
released at this time.
- The BAC holder may be able to obtain a higher price on the secondary
market, although no such price can be guaranteed and in fact, the BAC
holder may obtain a lower price in the secondary market. In recent
trading activity, prices for the BACs appear to have been lower for
tender offers than for transactions occurring in the secondary
markets. For example, in or about November 2005 the Offeror purchased
2,700 BACs in the secondary market for $1.90 per BAC, while in or
about December 2005 another investor purchased BACs for $0.30 per BAC
through a tender offer. Prices are not necessarily always lower in
tender offer, however, and BAC holders may in fact obtain a lower
price in the secondary markets.
- Neither the Partnership nor, to the General Partner's knowledge, the
Offeror has retained a third party to perform an evaluation or an
appraisal to determine whether the price offered in the Paco Offer is
fair.
- If the Paco Offer is fully subscribed, the Offeror and its affiliates
will own approximately 19% of the outstanding BACs.
- Certain BAC holders who tender their BACs could recognize a taxable
gain upon sale of their BACs.
- As the market for the BACs is an illiquid market, the Paco Offer will
provide the BAC holders with an immediate opportunity to liquidate
their investment in the BACs.
- BAC holders should consult with their advisors about the financial,
tax, legal and other consequences of the Paco Offer.
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Neither the Partnership nor any executive officer, director, affiliate or
subsidiary of the Partnership currently intends to tender or sell the BACs that
are held of record or beneficially owned by them pursuant to the Paco Offer.
ITEM 5. PERSON/ASSETS, RETAINED, EMPLOYED, COMPENSATED OR USED.
Neither the Partnership nor any person acting on its behalf has employed,
retained or compensated, or intends to employ, retain or compensate, any person
to make solicitations or recommendations to the BAC holders on its behalf
concerning the Paco Offer.
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
Neither the Partnership nor the General Partner or any of their executive
officers, directors, affiliates or subsidiaries have affected any transactions
in the BACs during the past 60 days.
ITEM 7. PURPOSES OF THE TRANSACTION AND PLANS OR PROPOSALS.
(a) No negotiation is being undertaken by the Partnership or the General
Partner in response to the Paco Offer, which relates to or would result in: (1)
a tender offer for or other acquisition of securities by or of the Partnership;
(2) an extraordinary transaction such as a merger, reorganization or
liquidation, involving the Partnership or any subsidiary of the Partnership; (3)
a purchase, sale or transfer of a material amount of assets by the Partnership
or any subsidiary; (4) any material change in the present dividend rate or
policy, or indebtedness or capitalization of the Partnership.
(b) There are no transactions, board resolutions, agreements in principle,
or signed contracts in response to the Paco Offer that relates to or would
result in one or more of the matters referred to in item 7(a).
ITEM 8. ADDITIONAL INFORMATION.
None.
ITEM 9. EXHIBITS.
(a)(1) Letter to the holders of BACs, dated February 8, 2006.
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SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
BOSTON CAPITAL TAX CREDIT FUND III L.P.
Boston Capital Tax Credit Fund III L.P.
By: Boston Capital Associates III L.P.
General Partner
By: BCA Associates Limited Partnership,
General Partner
By: C&M Management Inc.,
General Partner
Date: February 8, 2006 By: /s/ John P. Manning
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John P. Manning
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EXHIBIT 1 TO
SCHEDULE 14D-9
SOLICITATION/RECOMMENDATION STATEMENT
UNDER SECTION 14(d)(4) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
BOSTON CAPITAL TAX CREDIT FUND III L.P.
A DELAWARE LIMITED PARTNERSHIP
One Boston Place, Suite 2100
Boston, MA 02108
February 8, 2006
Dear Limited Partner:
As you are aware, a bidder has made an offer to purchase Series 19
Beneficial Assignee Certificates ("BACs") which evidence the beneficial interest
of an assignee in the Series 19 limited partnership interests of Boston Capital
Tax Credit Fund III L.P., a Delaware limited partnership (the "Partnership").
Paco Development, L.L.C., a Missouri limited liability company, has made an
offer (the "Paco Offer") to purchase BACs for a cash purchase price of $1.00 per
BAC, without interest, upon the terms and conditions set forth in the "Offer to
Purchase for Cash 770,000 Series 19 Beneficial Assignee Certificates in Boston
Capital Tax Credit Fund III L.P.," dated January 27, 2006.
The General Partner is recommending AGAINST tendering BACs with respect to
the Paco Offer and believes the BAC holders should carefully consider, with the
assistance of their financial advisors, the following factors in making their
own decision about whether to accept or reject the Paco Offer:
- BAC holders who tender their BACs will lose the right to receive any
future distributions from the Partnership, including distributions
from any refinancing or sale of the Partnership's properties, although
there can be no assurance as to the timing, amount or occurrence of
any future distributions.
- BAC holders who tender their BACs will forego the benefit of any
future income and loss allocations from the Partnership with respect
to such BACs.
- If the BAC holder does not tender BACs and he/she has losses that have
not yet been used to offset passive income, these losses would
continue to accrue to the BAC holder and therefore would not be
released at this time.
- The BAC holder may be able to obtain a higher price on the secondary
market, although no such price can be guaranteed and in fact, the BAC
holder may obtain a
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lower price in the secondary market. In recent trading activity,
prices for the BACs appear to have been lower for tender offers than
for transactions occurring in the secondary markets. For example, in
or about November 2005 the Offeror purchased 2,700 BACs in the
secondary market for $1.90 per BAC, while in or about December 2005
another investor purchased BACs for $0.30 per BAC through a tender
offer. Prices are not necessarily always lower in tender offer,
however, and BAC holders may in fact obtain a lower price in the
secondary markets.
- Neither the Partnership nor, to the General Partner's knowledge, the
Offeror has retained a third party to perform an evaluation or an
appraisal to determine whether the price offered in the Paco Offer is
fair.
- If the Paco Offer is fully subscribed, the Offeror and its affiliates
will own approximately 19% of the outstanding BACs.
- Certain BAC holders who tender their BACs could recognize a taxable
gain upon sale of their BACs.
- As the market for the BACs is an illiquid market, the Paco Offer will
provide the BAC holders with an immediate opportunity to liquidate
their investment in the BACs.
- BAC holders should consult with their advisors about the financial,
tax, legal and other consequences of the Paco Offer.
A copy of the Partnership's Statement on Schedule 14D-9 has been filed with
the Securities and Exchange Commission and sets forth the Partnership's response
to the Paco Offer. Limited partners are advised to carefully read the Schedule
14D-9.
Should you have any questions concerning the Paco Offer, please call our
investor services department at 1-800-955-2733 between 9 a.m. and 5 p.m. Eastern
Standard Time.
Sincerely,
BOSTON CAPITAL TAX CREDIT FUND III L.P.
By: Boston Capital Associates III L.P.
General Partner
By: BCA Associates Limited Partnership,
General Partner
By: C&M Management Inc.,
General Partner
By: /s/ John P. Manning
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John P. Manning