NexPoint Extends Offer to Purchase Up to All Shares of United Development Funding IV (UDFI)

Rhea-AI Summary

NexPoint Advisors, L.P. announced an extension for its offer to purchase all Shares of United Development Funding IV (UDFI) at $1.10 per share. The offering period will now expire on March 25, 2022. This extension follows conditions set previously, including the need for waivers related to ownership limits and other legal considerations. UDFI has reduced share ownership limits from 9.8% to 5.0%, a move seen as an attempt to hinder the offer. Shareholders are advised to review the Offer to Purchase and related materials for essential information.

Positive

• Offer price set at $1.10 per share, potentially attractive for shareholders.
• NexPoint is pursuing its investment strategy effectively by extending the offer period.

Negative

• UDFI's reduction of share ownership limits from 9.8% to 5.0% may hinder investor interest.
• Legal challenges could arise that may complicate the acquisition process.

DALLAS, Feb. 25, 2022 /PRNewswire/ -- NexPoint Advisors, L.P., investment adviser to the NexPoint Diversified Real Estate Trust (together "NexPoint"), today announced the extension of the offering period for its previously announced offer to purchase any and all Shares of Beneficial Interest (the "Shares") of United Development Funding IV ("UDFI" or the "Company") at a price of $1.10 per Share upon the terms and subject to the conditions set forth in the Offer to Purchase and in the related Assignment Form for the offer (which together constitute the "Offer" and the "Tender Offer Documents"). The Offer is now scheduled to expire at 12:00 midnight, Eastern Time, at the end of the day on March 25, 2022, unless the Offer is extended or earlier terminated. The Tender Offer Documents are available at www.UDFITenderOffer.com, or from the information agent for the Offer, as discussed below.

As previously announced on December 14, 2020, the Offer is conditioned upon, among other things, the satisfaction or waiver of the following conditions: (i) there shall not have been threatened, instituted, or pending any action or proceeding before any court or any governmental or administrative agency (a) challenging the acquisition of shares pursuant to the Offer or otherwise relating in any manner to the Offer, or (b) in the sole judgment of NexPoint, otherwise materially adversely affecting the Company; (ii) NexPoint shall have received all required governmental approvals, if any, for the Offer; (iii) NexPoint shall have had the opportunity to conduct sufficient due diligence to determine whether the offered price per share is reasonable given the current financial condition and results of operations of UDFI; (iv) the Board of Trustees of UDFI shall have waived in writing the ownership limitations set forth in Article VII of the Declaration of Trust of UDFI as such limitations would otherwise apply to the Offer; and (v) NexPoint shall have received satisfactory evidence that UDFI has continued to qualify as a real estate investment trust ("REIT") under federal tax laws and thereby to avoid any entity-level federal income or excise tax.

On January 8, 2021, UDFI announced that it had reduced the percentage of outstanding Shares that a shareholder may own from 9.8% to 5.0%. The Company took such action in an effort to frustrate the Offer. It also announced it amended the Company's bylaws to require that certain legal actions could be brought on behalf of or against UDFI only in certain courts in Maryland. NexPoint is reviewing these actions and their legality under applicable law.

Shareholders should read the Offer to Purchase and the related materials carefully because they contain important information. Shareholders may obtain a free copy of the Offer to Purchase and the Assignment Form from D.F. King & Co., Inc., the information agent for the Offer (the "Information Agent"), by calling toll-free at (800) 331-7543. THE OFFER WILL EXPIRE AT 12:00 MIDNIGHT, EASTERN TIME, AT THE END OF THE DAY ON MARCH 25, 2022, UNLESS THE OFFER IS EXTENDED OR EARLIER TERMINATED.

About the NexPoint Diversified Real Estate Trust (NXDT)

The NexPoint Diversified Real Estate Trust (NYSE: NXDT), formerly the NexPoint Strategic Opportunities Fund (NYSE: NHF), is a closed-end fund managed by NexPoint Advisors, L.P. that is in the process of converting to a diversified REIT. The name change became effective on November 8, 2021. On August 28, 2020, shareholders approved the conversion proposal and amended NXDT's fundamental investment policies and restrictions to permit NXDT to pursue its new business. NXDT has completed the repositioning of its investment portfolio sufficient to achieve REIT tax status and is operating during its 2021 taxable year so that it may qualify for taxation as a REIT.NXDT has also realigned its portfolio so that it is no longer an "investment company" under the Investment Company Act of 1940 (the "1940 Act"). On March 31, 2021, NXDT filed an application with the Securities and Exchange Commission (the "SEC") for an order under the 1940 Act declaring that NXDT no longer operates as an investment company (the "Deregistration Order"). During the SEC's review process, NXDT will continue to be structured as a closed-end investment fund.

For more information visit www.nexpoint.com/nexpoint-strategic-opportunities-fund

About NexPoint Advisors, L.P.

NexPoint Advisors, L.P. is an SEC-registered adviser on the NexPoint alternative investment platform. It serves as the adviser to a suite of funds and investment vehicles, including a closed-end fund, interval fund, business development company, and various real estate vehicles. For more information visit www.nexpoint.com  

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Risks and Disclosures

This document is for informational purposes only and is neither an offer to purchase nor a solicitation of an offer to sell any common stock of UDFI or any other securities. The offer to purchase common stock of UDFI will only be made pursuant to the Offer to Purchase, the Assignment Form and related documents. THE TENDER OFFER MATERIALS (INCLUDING THE OFFER TO PURCHASE, THE ASSIGNMENT FORM AND CERTAIN OTHER TENDER OFFER DOCUMENTS) WILL CONTAIN IMPORTANT INFORMATION. STOCKHOLDERS OF UDFI ARE URGED TO READ THESE DOCUMENTS CAREFULLY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION THAT SUCH STOCKHOLDERS SHOULD CONSIDER BEFORE MAKING ANY DECISION REGARDING TENDERING THEIR SHARES. Investors and security holders may obtain a free copy of these statements (when available) by directing such requests to the Information Agent, by calling toll-free at (800) 331-7543.

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Media Contact

Lucy Bannon
MediaRelations@nexpoint.com  

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SOURCE NexPoint Advisors, L.P.

FAQ

What is the new expiration date for NexPoint's offer to purchase UDFI shares?

The new expiration date is March 25, 2022.

What is the purchase price offered by NexPoint for UDFI shares?

NexPoint is offering $1.10 per share.

What changes did UDFI implement regarding share ownership limits?

UDFI reduced the share ownership limit from 9.8% to 5.0%.

Are there any legal challenges related to NexPoint's offer for UDFI shares?

Yes, UDFI's actions might lead to legal challenges affecting the acquisition.

Where can shareholders obtain the Offer to Purchase documents?

Shareholders can obtain the documents from D.F. King & Co., Inc. at 800-331-7543.