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Offer to Purchase For Cash
AIMCO
AIMCO Properties, L.P.
is offering to purchase limited partnership units in
SHELTER PROPERTIES VI
FOR $346.00 PER UNIT IN CASH
Upon the terms and subject to the conditions set forth herein, we will accept
units validly tendered in response to our offer.
If units are validly tendered and not properly withdrawn prior to the expiration
date and the purchase of all such units would result in there being fewer than
320 unitholders, we will purchase only 99% of the total number of units so
tendered by each limited partner. See "The Offer--Section 7. Effects of the
Offer".
Our offer and your withdrawal rights will expire at midnight, New York City
time, on June 6, 2002, unless we extend the deadline.
You will not pay any partnership transfer fees if you tender your units. You
will pay any other fees and costs, including any transfer taxes.
Our offer price will be reduced by the amount of any distributions subsequently
made by your partnership prior to the expiration of our offer.
SEE "RISK FACTORS" BEGINNING ON PAGE 4 OF THIS OFFER TO PURCHASE FOR A
DESCRIPTION OF RISK FACTORS THAT YOU SHOULD CONSIDER IN CONNECTION WITH OUR
OFFER, INCLUDING THE FOLLOWING:
o We determined the offer price of $346.00 per unit without any
arms-length negotiations. Accordingly, our offer price may not reflect
the fair market value of your units.
o As described in more detail herein, certain legal actions have been
filed alleging, among other things, breaches of fiduciary duty by your
partnership's general partner and certain of its affiliates. Although
we cannot predict the outcome of these actions, including the nature,
if any, of any final relief or settlement, a limited partner who
tenders his units in the offer may not be able to participate in or
benefit from any such later relief or settlement. Limited partners will
be expected to assign any claims they have to the purchaser as a
condition of tendering their units. There can be no assurance that a
limited partner would not realize greater value for his units by
holding on to his units at this time and waiting for any such relief or
settlement in the future. We advise you to consult legal counsel if you
have any questions. See "The Offer - Section 13. Certain Information
Concerning Your Partnership."
o Your partnership's general partner and the residential property manager
are subsidiaries of ours, and the general partner therefore has
substantial conflicts of interest with respect to our offer.
o We are making this offer with a view to making a profit and, therefore,
there is a conflict between our desire to purchase your units at a low
price and your desire to sell your units at a high price.
(Continued on next page)
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If you decide to accept our offer, you should complete and sign the
enclosed acknowledgment and agreement as instructed in the letter of
transmittal, which is attached to this offer to purchase as Annex II. The signed
acknowledgment and agreement and any other documents required by the letter of
transmittal must be mailed or delivered to River Oaks Partnership Services,
Inc., which is acting as Information Agent in connection with our offer, at one
of its addresses set forth on the back cover of this offer to purchase.
QUESTIONS AND REQUESTS FOR ASSISTANCE OR FOR ADDITIONAL COPIES OF THIS OFFER TO
PURCHASE, THE ACKNOWLEDGMENT AND AGREEMENT, OR THE LETTER OF TRANSMITTAL MAY BE
DIRECTED TO THE INFORMATION AGENT AT (888) 349-2005.
May 8, 2002
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(Continued from prior page)
o Continuation of your partnership will result in our affiliates
continuing to receive management fees from your partnership. Such fees
would not be payable if your partnership were liquidated.
o It is possible that we may conduct a future offer at a higher price.
o For any units that we acquire from you, you will not receive any future
distributions from operating cash flow of your partnership or upon a
sale or refinancing of property owned by your partnership.
o The general partner makes no recommendation as to whether you should
tender your units.
o We and our affiliates own a majority of the outstanding units of your
partnership. As a result, we and our affiliates control most voting
decisions with respect to your partnership, including but not limited
to the removal of the general partner and the sale of all or
substantially all of your partnership's assets.
THE INFORMATION AGENT FOR THE OFFER IS:
RIVER OAKS PARTNERSHIP SERVICES, INC.
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By Mail: By Overnight Courier: By Hand:
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P.O. Box 2065 111 Commerce Road 111 Commerce Road
S. Hackensack, NJ 07606-2065 Carlstadt, NJ 07072 Carlstadt, NJ 07072
Attn: Reorganization Dept. Attn: Reorganization Dept.
By facsimile: For information please call:
(201) 896-0910 TOLL FREE (888) 349-2005
Or
(201) 896-1900
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TABLE OF CONTENTS
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Page
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SUMMARY TERM SHEET................................................................................................1
RISK FACTORS......................................................................................................4
If you tender all of your units, you may not be able to participate in any final litigation relief or
settlement. .................................................................................................4
We did not obtain a third-party valuation or appraisal and did not determine our offer price through
arms-length negotiation......................................................................................4
Our offer price may not represent fair market value............................................................4
Our offer price does not reflect future prospects..............................................................4
Our offer price may not represent liquidation value............................................................4
Continuation of the Partnership; No time frame regarding sale of property......................................4
Holding your units may result in greater future value..........................................................5
Your general partner faces conflicts of interest with respect to the offer.....................................5
Your general partner is not making a recommendation with respect to this offer.................................5
Your general partner faces conflicts of interest relating to management fees...................................5
We may make a future offer at a higher price...................................................................5
You will recognize taxable gain on a sale of your units........................................................5
If you tender units to us in this offer, you will no longer be entitled to distributions from your
partnership..................................................................................................6
We control your partnership....................................................................................6
You could recognize gain in the event of a reduction in your partnership's liabilities.........................6
We may delay our acceptance of, and payment for, your units....................................................6
Your partnership has balloon payments on its mortgage debt.....................................................6
THE OFFER.........................................................................................................6
Section 1. Terms of the Offer; Expiration Date; Proration.....................................................6
Section 2. Acceptance for Payment and Payment for Units.......................................................7
Section 3. Procedure for Tendering Units......................................................................8
Section 4. Withdrawal Rights.................................................................................10
Section 5. Extension of Tender Period; Termination; Amendment; No Subsequent Offering Period.................11
Section 6. Certain Federal Income Tax Matters................................................................12
Section 7. Effects of the Offer..............................................................................14
Section 8. Information Concerning Us and Certain of our Affiliates...........................................15
Section 9. Background and Reasons for the Offer..............................................................18
Section 10. Position of the General Partner of your Partnership with respect to the Offer..................23
Section 11. Conflicts of Interest and Transactions with Affiliates.........................................23
Section 12. Future Plans of the Purchaser..................................................................24
Section 13. Certain Information concerning your Partnership................................................25
Section 14. Voting Power...................................................................................32
Section 15. Source of Funds................................................................................33
Section 16. Dissenters' Rights.............................................................................33
Section 17. Conditions of the Offer........................................................................33
Section 18. Certain Legal Matters..........................................................................35
Section 19. Fees and Expenses..............................................................................36
ANNEX I - OFFICERS AND DIRECTORS..................................................................................1
ANNEX II - LETTER OF TRANSMITTAL..................................................................................1
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SUMMARY TERM SHEET
This summary term sheet highlights the most material information
regarding our offer, but it does not describe all of the details thereof. We
urge you to read this entire offer to purchase, which contains the full details
of our offer. We have also included in the summary term sheet references to the
sections of this offer to purchase where a more complete discussion may be
found.
o THE OFFER. Subject to the terms hereof, we are offering to acquire
limited partnership units of Shelter Properties VI, your partnership,
for $346.00 per unit in cash. See "The Offer--Section 1. Terms of the
Offer; Expiration Date; Proration", "The Offer--Section 7. Effects of
the Offer" and "The Offer--Section 9. Background and Reasons for the
Offer--Determination of Offer Price."
o FACTORS IN DETERMINING THE OFFER PRICE. In determining the offer price
per unit we principally considered:
o The per unit liquidation value of your partnership, which we
calculated to be $346.00, based on the pro forma operating
results of your partnership for the quarter ended March 31,
2002, as capitalized using the direct capitalization method
and using a capitalization rate of 10.84% with respect to
Carriage House Apartments, 11.55% with respect to Nottingham
Square Apartments, 12.12% with respect to River Reach
Apartments, 11.33% with respect to Rocky Creek Apartments and
11.36% with respect to Village Gardens Apartments.
o Prices at which units have recently sold to the extent such
information is available to us.
o The absence of a trading market for the units. See "The
Offer--Section 9. Background and Reasons for the
Offer--Comparison of Offer Price to Alternative
Consideration."
o PRORATIONS. If more units than can be purchased under the partnership
agreement are tendered and not withdrawn, we will accept for payment
and pay for those units so tendered, which do not violate the terms of
your partnership agreement, pro rata according to the number of units
so tendered, with appropriate adjustments to avoid purchases of
fractional units. See "The Offer--Section 2. Acceptance for Payment and
Payment for Units." In addition, if the purchase of all validly
tendered units would result in there being fewer than 320 holders of
units, we will purchase only 99% of the total number of units so
tendered by each holder. See "The Offer--Section 1. Terms of the Offer;
Expiration Date; Proration" and "The Offer--Section 7. Effects of the
Offer."
o EXPIRATION DATE. Our offer expires on June 6, 2002, unless extended,
and you can tender your units until our offer expires. See "The
Offer--Section 1. Terms of the Offer; Expiration Date; Proration."
o RIGHT TO EXTEND THE EXPIRATION DATE. We can extend the offer in our
sole discretion, and we will either issue a press release or send you a
notice of any such extension. See "The Offer--Section 5. Extension of
Tender Period; Termination; Amendment; No Subsequent Offering Period."
o HOW TO TENDER. To tender your units, complete the accompanying
acknowledgment and agreement and send it, along with any other
documents required by the letter of transmittal which is attached to
this offer to purchase as Annex II, to the Information Agent, River
Oaks Partnership Services, Inc., at one of the addresses set forth on
the back of this offer to purchase. See "The Offer--Section 3.
Procedure for Tendering Units."
o WITHDRAWAL RIGHTS. You can withdraw your units at any time prior to the
expiration of the offer, including any extensions. In addition, you can
withdraw your units at any time on or after July 8, 2002 if we have not
already accepted units for purchase and payment. See "The
Offer--Section 4. Withdrawal Rights."
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o HOW TO WITHDRAW. To withdraw your units, you need to send a notice of
withdrawal to the Information Agent, identifying yourself and the units
to be withdrawn. See "The Offer--Section 4. Withdrawal Rights."
o TAX CONSEQUENCES. Your sale of units in this offer will be a taxable
transaction for federal income tax purposes. The consequences to each
limited partner may vary and you should consult your tax advisor on the
precise tax consequences to you. See "The Offer--Section 6. Certain
Federal Income Tax Matters."
o AVAILABILITY OF FUNDS. We currently have the necessary cash and a line
of credit to consummate the offer. See "The Offer--Section 15. Source
of Funds."
o CONDITIONS OF THE OFFER. There are a number of conditions of our offer,
including our having adequate cash and borrowings under a line of
credit, the absence of competing tender offers, the absence of certain
changes in your partnership, and the absence of certain changes in the
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