UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13E-3
RULE 13E-3 TRANSACTION STATEMENT UNDER SECTION 13(e)
OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 5)
TRANSCONTINENTAL REALTY INVESTORS, INC.
(Name of the Issuer)
BASIC CAPITAL MANAGEMENT, INC.
GENE E. PHILLIPS
TRANSCONTINENTAL REALTY INVESTORS, INC.
INCOME OPPORTUNITY ACQUISITION CORPORATION
INCOME OPPORTUNITY REALTY INVESTORS, INC.
(Names of Persons Filing Statement)
COMMON STOCK, PAR VALUE .01 PER SHARE
(Title of Class of Securities)
893617-20-9
(CUSIP Number of Class of Securities)
ROBERT A. WALDMAN
1800 VALLEY VIEW LANE, SUITE 300
DALLAS, TEXAS 75234
(469) 522-4200
(469) 522-4360 (FAX)
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With copies to:
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STEVEN C. METZGER, ESQ. JEFFREY M. SONE, ESQ.
PRAGER METZGER & KROEMER, PLLC JACKSON WALKER L.L.P.
2626 COLE AVENUE, SUITE 900 901 MAIN STREET, SUITE 6000
DALLAS, TEXAS 75204 DALLAS, TEXAS 75202
(214) 969-7600 (214) 953-6000
(214) 523-3838 (FAX) (214) 953-5822(FAX)
(Name, Address, and Telephone Numbers of Person Authorized to Receive
Notices and Communications on Behalf of the Persons Filing Statement)
This statement is filed in connection with (check the appropriate box):
a. [ ] The filing of solicitation materials or an information statement subject
to Regulation 14A, Regulation 14C or Rule 13e-3(c) under the Securities Exchange
Act of 1934.
b. [X] The filing of a registration statement under the Securities Act of 1933.
c. [X] A tender offer.
d. [ ] None of the above.
Check the following box if the soliciting materials or information
statement referred to in checking box (a) are preliminary copies: [ ]
Check the following box if the filing is a final amendment reporting
the results of the transaction: [ ]
Calculation of Filing Fee
Transaction valuation* Amount of filing fee
---------------------- --------------------
$8,050,688 $740.66
*Filing fee determined by multiplying: (i) 4,025,344 shares of 10%
Series G Cumulative Redeemable Convertible preferred stock, par value $2.00 per
share, which represents the maximum number of shares of Series G Redeemable
Convertible preferred stock to be issued in connection with the merger of
Transcontinental Realty Investors, Inc. described herein at the exchange ratio
of one share of Series G Redeemable Convertible preferred stock for each share
of TCI common stock outstanding (other than shares owned by American Realty
Investors, Inc. or its subsidiaries), by (ii) $2.00, the par value of the Series
G Cumulative Redeemable Convertible preferred stock, by (iii) .000092.
[X] Check the box if any part of the fee is offset as provided by Section
240.0-11(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: $11,786.96 Filing Party: American Realty Investors, Inc.
Form or Registration No.: 333-83292 Date Filed: February 22, 2002
RULE 13E-3 TRANSACTION STATEMENT
Introduction
This Amendment No. 5 amends and supplements the Schedule 13E-3
Transaction Statement on Schedule 13e-3 (this "Transaction Statement")
previously filed on July 31, 2002, as amended, and is filed pursuant to Section
13(e) of the Securities Exchange Act of 1934, as amended. The original Schedule
13E-3 and Amendment No. 1 were filed in connection with a proposed business
combination that resulted from a court approved settlement (the "Settlement
Agreement") of a lawsuit styled Jack Olive, et. al. v. National Income Realty
Trust, et al, Case No. C89 4331 MHP pending in the United States District Court
for the Northern District of California (the "Olive Litigation"). The claims in
the Olive Litigation related to the operation and management of Transcontinental
Realty Investors, Inc. ("TCI") and Income Opportunity Realty Investors, Inc.
("IOT"). Defendants in the lawsuit included, among others, American Realty
Trust, Inc. (a subsidiary of American Realty Investors, Inc. ("ARL")), TCI, IOT,
Basic Capital Management, Inc. ("BCM") and Gene E. Phillips ("Mr. Phillips").
BCM is a contractual advisor that is responsible for managing the affairs of
ARL, TCI and IOT and for advising the respective boards on setting the policies
which guide ARL, TCI and IOT.
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ARL filed Registration Statement No. 333-83292 on Form S-4 to register
the consideration in the proposed business combination and to seek stockholder
approval of the business combination. The SEC review process relating to the
Registration Statement has not been completed. Pursuant to the terms of the
Settlement Agreement, ARL, through its subsidiary, Transcontinental Realty
Acquisition Corporation ("TCI Acquisition Sub"), commenced a tender offer for
any or all of the TCI common stock on November 15, 2002 in order to cure a
default under the Settlement Agreement. This Amendment No. 5 to this Transaction
Statement sets forth disclosures related to that tender offer.
Pursuant to the tender offer TCI Acquisition Sub offered to purchase
any and all of the issued and outstanding shares of common stock of TCI for
$17.50 net per share in cash upon the terms and subject to the conditions set
forth in the Offer to Purchase, dated November 15, 2002 (the "Offer to
Purchase"). The Offer to Purchase was filed as Exhibit (a)(1) to the Schedule TO
filed on November 15, 2002 by ARL and TCI Acquisition Sub, as amended by
Amendment Nos. 1, 2, 3, 4, 5 and 6 (the "Schedule TO"). The information set
forth in the Offer to Purchase and the Letter of Transmittal (filed as Exhibit
(a)(2) to the Schedule TO), including all schedules, exhibits and annexes
thereto, is hereby expressly incorporated herein by reference in response to all
items of information required to be included in, or covered by, this Transaction
Statement. The responses to each item in this Transaction Statement are
qualified in their entirety by the information contained in the Offer to
Purchase and the exhibits, as amended.
ITEM 1. SUMMARY TERM SHEET.
Item 1 of the Transaction Statement is hereby amended as follows:
See Item 1 and Item 13 of the Schedule TO, which is incorporated herein
by reference.
ITEM 4. TERMS OF THE TRANSACTION.
Item 4 of the Transaction Statement is hereby amended as follows:
See Item 4 and Item 13 of the Schedule TO and Section 10 of the Offer
to Purchase, "Rights of Dissenting Stockholders," which are incorporated herein
by reference.
ITEM 16. EXHIBITS.
Item 16 of the Transaction Statement is hereby amended as follows:
See Item 12 of the Schedule TO, which is incorporated herein by
reference.
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SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information is set forth in this statement is true, complete and
correct.
BASIC CAPITAL MANAGEMENT, INC.
Date: February 21, 2003 By: /s/ RONALD E. KIMBROUGH
-------------------- ---------------------------------------
Printed Name: Ronald E. Kimbrough
Title: Executive Vice President and Chief
Financial Officer
Date: February 21, 2003 By: /s/ GENE E. PHILLIPS
-------------------- ---------------------------------------
Printed Name: Gene E. Phillips
TRANSCONTINENTAL REALTY
INVESTORS, INC.
Date: February 21, 2003 By: /s/ RONALD E. KIMBROUGH
-------------------- ---------------------------------------
Printed Name: Ronald E. Kimbrough
Title: Executive Vice President and Chief
Financial Officer
INCOME OPPORTUNITY ACQUISITION
CORPORATION
Date: February 21, 2003 By: /s/ RONALD E. KIMBROUGH
-------------------- ---------------------------------------
Printed Name: Ronald E. Kimbrough
Title: Director and President
INCOME OPPORTUNITY REALTY
INVESTORS, INC.
Date: February 21, 2003 By: /s/ RONALD E. KIMBROUGH
-------------------- ---------------------------------------
Printed Name: Ronald E. Kimbrough
Title: Executive Vice President and Chief
Financial Officer