-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, KvulShc/Rrq5NY5becRKahVowLrjd+dxeymfGyIbUbjGpcYBWf8xwOk14b3MvAD2 oPfe5cyl6tFsdssn+WHEug== 0000902664-96-000142.txt : 19961204 0000902664-96-000142.hdr.sgml : 19961204 ACCESSION NUMBER: 0000902664-96-000142 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 19961203 SROS: NONE GROUP MEMBERS: GOTHAM PARTNERS II, L.P. GROUP MEMBERS: GOTHAM PARTNERS LP /NY/ GROUP MEMBERS: GOTHAM PARTNERS, L.P. SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: SANTA ANITA OPERATING CO CENTRAL INDEX KEY: 0000313749 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-RACING, INCLUDING TRACK OPERATION [7948] IRS NUMBER: 953419438 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-40340 FILM NUMBER: 96675044 BUSINESS ADDRESS: STREET 1: 285 W HUNTINGTON DR STREET 2: PO BOX 808 CITY: ARCADIA STATE: CA ZIP: 91066-0808 BUSINESS PHONE: 8185747223 MAIL ADDRESS: STREET 1: 285 W HUNTINGTON DRIVE STREET 2: P O BOX 808 CITY: ARCADIA STATE: CA ZIP: 91066-0808 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: GOTHAM PARTNERS LP /NY/ CENTRAL INDEX KEY: 0000899983 STANDARD INDUSTRIAL CLASSIFICATION: [] FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 237 PARK AVENUE 9TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10017 SC 13D 1 SCHEDULE 13D SCHEDULE 13D Under the Securities Exchange Act of 1934 (Amendment No. __) Santa Anita Operating Company (Name of Issuer) Common Stock, $0.10 par value (Title of class of securities) 801212101 (CUSIP Number) Peter A. Nussbaum, Esq. Schulte Roth & Zabel LLP 900 Third Avenue New York, New York 10022 (212) 756-2000 (Name, address and telephone number of person authorized to receive notices and communications) November 21, 1996 (Date of event which requires filing of this statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d- 1(b)(3) or (4), check the following box [ ]. Check the following box if a fee is being paid with the statement [ ]. (A fee is not required only if the reporting person: (1) has a previous statement on file reporting beneficial ownership of more than five percent of the class of securities described in Item 1; and (2) has filed no amendment subsequent thereto reporting beneficial ownership of five percent or less of such class.) (See Rule 13d-7.) Note: Six copies of this statement, including all exhibits, should be filed with the Commission. See Rule 13d-1(a) for other parties to whom copies are to be sent. * The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). SCHEDULE 13D CUSIP No. 801212101 Page 2 of 10 Pages 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Gotham Partners, L.P. 13-3700768 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A (a) [x] GROUP* (b) [ ] 3 SEC USE ONLY 4 SOURCE OF FUNDS* WC 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS [ ] IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) 6 CITIZENSHIP OR PLACE OF ORGANIZATION New York NUMBER OF 7 SOLE VOTING POWER SHARES 580,472 BENEFICIALLY 8 SHARED VOTING POWER OWNED BY EACH 0 9 SOLE DISPOSITIVE POWER REPORTING 580,472 PERSON WITH 10 SHARED DISPOSITIVE POWER 0 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 580,472 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) [ ] EXCLUDES CERTAIN SHARES* 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 5.1% 14 TYPE OF REPORTING PERSON* PN SCHEDULE 13D CUSIP No. 801212101 Page 3 of 10 Pages 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Gotham Partners II, L.P. 13-3863925 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A (a) [x] GROUP* (b) [ ] 3 SEC USE ONLY 4 SOURCE OF FUNDS* WC 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS [ ] IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) 6 CITIZENSHIP OR PLACE OF ORGANIZATION New York NUMBER OF 7 SOLE VOTING POWER SHARES 8,828 BENEFICIALLY 8 SHARED VOTING POWER OWNED BY EACH 0 9 SOLE DISPOSITIVE POWER REPORTING 8,828 PERSON WITH 10 SHARED DISPOSITIVE POWER 0 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 8,828 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) [ ] EXCLUDES CERTAIN SHARES* 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) .078% 14 TYPE OF REPORTING PERSON* PN Page 4 of 10 Pages 1. Security and Issuer This statement on Schedule 13D (the "Statement") relates to the shares of common stock par value $0.10 per share (the "Shares"), of Santa Anita Operating Company, a Delaware corporation (the "Company"). The principal executive offices of the Company are located at 285-301 West Huntington Drive, Arcadia, CA 91066-6014. Item 2. Identity and Background This Statement is being filed by Gotham Partners, L.P., a New York limited partnership ("Gotham"), and Gotham Partners II, L.P., a New York limited Partnership ("Gotham II" and together with Gotham, the "Reporting Persons"). Each of Gotham and Gotham II was formed to engage in the buying and selling of securities for investment for its own account. Section H Partners, L.P., a New York limited partnership ("Section H"), is the sole general partner of Gotham and Gotham II. Karenina Corp., a New York corporation ("Karenina"), and DPB Corp., a New York corporation ("DPB"), are the sole general partners of Section H. Karenina is wholly owned by Mr. William A. Ackman. DPB is wholly owned by Mr. David P. Berkowitz. Messrs. Ackman and Berkowitz are citizens of the United States of America, and their principal occupation is managing the affairs of Karenina and DPB, respectively, and through such entities, the affairs of Section H. Gotham and Gotham II Gotham. The business address of each of Gotham and Gotham II, Section H, Karenina, DPB and Messrs. Ackman and Berkowitz is 110 East 42nd Street, 18th Floor, New York, New York 10017. During the last five years, none of Gotham, Gotham II, Section H, Karenina, DPB, Mr. Ackman or Berkowitz (i) has been convicted in a criminal proceeding g(excluding traffic violations or similar misdemeanors) or (ii) has been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. Item 3. Source and Amount of Funds or Other Consideration The aggregate purchase price of the Shares and the shares of Santa Anita Ralty Enterprises, Inc. (together with the Company, the "Companies"), which trade together with the Shares (the "Paired Shares"), purchased by Gotham was $13,054,325 and the aggregate purchase price of the Shares and the Paired Shares purchased by Gotham II was $194,717. All of the funds required for these purchases were obtained form the general funds of Gotham and Gotham II, respectively. Item 4. Purpose of the Transaction The Reporting Persons acquired the Shares for investment purposes, and the Reporting Persons intend to evaluate the performance of such securities as an investment in the ordinary course of business. The Reporting Persons pursue an investment objective that seeks capital appreciation. In pursuing this investment objective, the Reporting Persons analyze the operations, capital structure and markets of companies in which they invest, including the Company, on a continuous basis through analysis of documentation and discussions with knowledgeable industry and market observers and with representatives of such companies (often at the invitation of management). Page 5 of 10 Pages Based on the Companies' Form 8-K filed with the SEC on August 17, 1996, in which the Companies announced a "strategic alliance" with Colony Investments II ("Colony"), and the Companies' more detailed filings and exhibits in its October 24, 1996 Form 8-K, the Reporting Persons are aware of the details of the Colony transaction. The Reporting Persons believe that the Colony transaction is not in the best interests of shareholders, and is dilutive to shareholders and destructive to shareholder value. Colony was allowed to purchase 112,700 Shares and Paired Shares and 867,343 putable paired preferred shares at $12.975, a price which is significantly below the Companies' net asset value per share even ignoring the value of the Companies' paired share structure. If the transaction is consummated, Colony will purchase newly issued UPREIT units which are convertible one-for-one into common shares at a price per common share equivalent of $15.24. Because Colony is not required to purchase these units before October 1, 1998, the Company will not have the use of this capital until the units are purchased. In addition, the equivalent share price to $15.24 on October 1, 1998 in December 1996 dollars is $11.59, using an equity discount rate of 15%. Thus, future sales of the Companies' stock to Colony will occur at prices largely below, on a present value basis, the price paid by Colony in its $12.975 purchase, and more than 50% below today's price. In substance, the transaction though characterized as a "strategic alliance," is, in the Reporting Persons' view, a sale of control of the Companies to Colony. Through the sale of 980,043 shares and units at $12.975 and the future sale of the UPREIT units, Colony will own 45% of the fully diluted common shares of each of the Companies. Even before Colony puts up additional capital to purchase UPREIT shares, Colony will assume de facto control of the Companies because: (1) the president of the Companies' operating subsidiary limited liability company, will be Kelvin L. Davis, a Colony appointee, (2) Colony will have the right to appoint two of five members of the operating subsidiaries' boards, and three of twelve (to be reduced to eleven) members of the Companies' boards. Despite this de facto change of control, Colony is not paying a premium to the market price of the Companies' shares, but rather is purchasing them at an enormous discount to market value. As part of the Colony transaction, Colony will seek to amend the 1995 share award program to allow for option grants equal to 9.5% of the outstanding Shares and Paired Shares calculated as if the Companies were to assume conversion of all UPREIT units Colony is obligated to purchase. The issuance of an enormous number of options will be dilutive to the exiting shareholders of the Companies. Despite the statement by the Company in a press release dated August 19, 1996, that Colony will "contribute its proved acquisition and real estate expertise, as well as its exceptional access to deal flow" to the Companies, the details of the transaction documents reveal that Colony will receive "Completion Fees" in amounts to be determined with respect to every acquisition that the Companies complete in addition to reimbursement of all of Colony's expenses associated with their involvement with the Companies. In summary, because of the above features of the Colony proposal, the Reporting Persons intend to vote against the Colony transaction. Page 6 of 10 Pages Based on an October 9, 1996 press release issued by Koll Arcadia Investors, LLC ("KAI") and a copy of Koll's letter to the Companies dated October 9, 1996 filed as Exhibit 99.1 to the Companies' October 24, 1996 8-K, the Reporting Persons are aware of the basic elements of the KAI proposal. As currently proposed, the KAI proposal appears substantially superior to the Colony proposal. In particular, the transaction appears to confer control to a new investor group at a significantly higher valuation, offers shareholders $14 per share in cash in a substantially tax-free special dividend, and gives shareholders the opportunity to participate in future transactions through non- dilutive rights offerings. The Reporting Persons encourage management to consider carefully the KAI proposal and to avoid spending the Companies' capital on the Colony transaction as currently proposed for it is destructive to shareholder value. The Reporting Persons may contact Colony and/or KAI to discuss ways in which they can improve their respective proposals. The reporting Persons may also contact management, other potential investors, as well as consider other alternatives to the existing Colony and KAI proposals. Each Reporting Person will continuously assess the Company's business, financial condition, results of operations and prospects, general economic conditions, the securities markets in general and those for the Company's securities in particular, other developments and other investment opportunities. Depending on such assessments, one or more of the Reporting Persons may acquire additional Shares and Paired Shares or may determine to sell or otherwise dispose of all or some of its holdings of Shares and Paired Shares. Such actions will depend upon a variety of factors, including, without limitation, current and anticipated future trading prices for such common stock, the financial condition, results of operations and prospects of the Companies, alternative investment opportunities, and general economic financial market and industry conditions. Except as set forth above, none of the Reporting Persons has any plans or proposals which would relate to or result in any of the matters set forth in items (a) through (j) of Item 4 of Schedule 13D. Item 5. Interest in Securities of the Issuer (a) Gotham owns 580,472 Shares as of the date of this Statement, representing an aggregate of approximately 5.1% of the outstanding Shares of the Company. Gotham II owns 8,828 Shares as of the date of this Statement, representing an aggregate of approximately .078% of the outstanding shares of the Company. The percentages used in this paragraph are calculated based upon 11,385,200 outstanding Shares of the Company, as of November 5, 1996, as reported in the Company's Form 10-Q for the quarter ended September 30, 1996. None of Section H, Karenina, DPB, Mr. Ackman or Mr. Berkowitz beneficially own any Shares (other than the Shares beneficially owned by Gotham and Gotham II). (b) Each of Gotham and Gotham II has sole power to vote and to dispose of all of the Shares beneficially owned by it. (c) The table below sets forth information with respect to all purchases and sales of Shares by Gotham and Gotham II (the prices represent the price for a unit consisting of one Share and one Paired Share). In each case, the transactions were affected in open-market transactions on the NASDAQ. Page 7 of 10 Pages Gotham Date Number of Units Price per Unit Purchased/ (Sold) 10/09/96 57,400 $20.35380 10/17/96 106,900 20.05660 10/18/96 82,216 20.06210 10/21/96 26,585 20.06000 10/22/96 20,775 20.06000 10/25/96 3,150 19.62640 10/31/96 19,690 21.34810 11/11/96 34,000 25.97210 11/12/96 14,275 26.33590 11/13/96 18,708 25.51000 11/14/95 17,723 25.54680 11/15/96 4,135 25.49750 11/18/96 15,655 25.44370 11/19/96 19,890 25.04020 11/20/96 72,370 24.67860 11/21/96 49,230 25.04900 11/25/96 2,070 24.40520 11/26/96 15,700 25.46840 Gotham II Date Number of Units Price per Unit Purchased/ (Sold) 10/09/96 1,100 $20.35380 10/17/96 2,000 20.05660 10/18/96 1,284 20.06210 10/21/96 415 20.06000 10/22/96 325 20.06000 10/25/96 50 19.62640 10/31/96 310 21.34810 11/12/96 225 26.33590 11/13/96 292 25.51000 11/14/95 277 25.54680 11/15/96 65 25.49750 11/18/96 245 25.44370 11/19/96 310 25.04020 11/20/96 1,130 24.67860 11/21/96 770 25.04900 11/25/96 30 24.40520 Except as described above, none of Gotham, Gotham II, Section H, Karenina, DPB, Mr. Ackman or Mr. Berkowitz has effected any transactions in the securities of the Company during the past sixty days. (d) and (e). Not applicable. Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer. None of Gotham, Gotham II, Section H, Karenina, DPB, Mr. Ackman or Mr. Berkowitz is a party to any contract, arrangement, understanding or relationship with respect to any securities of the Company, including but not limited to transfer or voting of any of the securities, finder's fees, joint ventures, loan Page 8 of 10 Pages or option agreements, puts or calls, guarantees of profits, divisions of profit or losses or the giving or withholding of proxies. Item 7. Material to be Filed as Exhibits The following exhibit is being filed with this Schedule: Exhibit 1 A written agreement relating to filing of joint acquisition statements as required by Rule 13d-1(f)(1) promulgated under the Securities Exchange Act of 1934, as amended. After reasonable inquiry and to the best of our knowledge and belief, the undersigned certify that the information set forth in this statement is true, complete and correct. December 2, 1996 GOTHAM PARTNERS, L.P. By: Section H Partners, L.P. its general partner By: KARENINA CORP., a general partner By: /s/ William A. Ackman William A. Ackman President By: DPB CORPORATION, a general partner of Section H Partners, L.P. By: /s/ David P. Berkowitz David P. Berkowitz President GOTHAM PARTNERS II, L.P. By: Section H Partners, L.P. its general partner By: KARENINA CORPORATION, a general partner of Section H Partners, L.P. By: /s/ William A. Ackman William A. Ackman President By: DPB CORPORATION, a general partner of Section H Partners, L.P. Page 9 of 10 Pages By: /s/ David P. Berkowitz David P. Berkowitz President EX-99 2 JOINT ACUISITION STATEMENT EXHIBIT 1 JOINT ACQUISITION STATEMENT PURSUANT TO RULE 13d-1(c) 1 The undersigned acknowledge and agree that the foregoing statement on Schedule 13D, as amended, is filed on behalf of each of the undersigned and that all subsequent amendments to this statement on Schedule 13D, as amended, shall be filed on behalf of each of the undersigned without the necessity of filing additional joint acquisition statements. The undersigned acknowledge that each shall be responsible for the timely filing of such amendments, and for the completeness and accuracy of the information concerning him or it contained therein, but shall not be responsible for the completeness and accuracy of the information concerning the other, except to the extent that he or it knows or has reason to believe that such information is inaccurate. DATED: December 2, 1996 GOTHAM PARTNERS, L.P. By: Section H Partners, L.P. its general partner By: KARENINA CORPORATION, a general partner of Section H Partners, L.P. By: /s/ William A. Ackman William A. Ackman President By: DPB CORPORATION, a general partner of Section H Partners, L.P. By: /s/ David P. Berkowitz David P. Berkowitz President GOTHAM PARTNERS II, L.P. By: Section H Partners, L.P. its general partner By: KARENINA CORPORATION, a general partner of Section H Partners, L.P. Page 10 of 10 Pages By: /s/ William A. Ackman William A. Ackman President By: DPB CORPORATION, a general partner of Section H Partners, L.P. By: /s/ David P. Berkowitz David P. Berkowitz President -----END PRIVACY-ENHANCED MESSAGE-----