NexPoint Extends Offer to Purchase Up to All Shares of United Development Funding IV (UDFI)
NexPoint Advisors has extended its offer to purchase Shares of Beneficial Interest of United Development Funding IV (UDFI) at $1.10 per share, now set to expire on June 23, 2022. The offer is contingent upon various conditions, including due diligence and required governmental approvals. NexPoint is also in the process of converting its NexPoint Diversified Real Estate Trust (NXDT) into a real estate investment trust (REIT). This conversion includes adjustments to investment policies and portfolio realignment to meet REIT tax status requirements.
- NexPoint successfully extended its share purchase offer until June 23, 2022.
- The conversion of NXDT into a REIT enhances its investment strategy and tax status.
- UDFI reduced the ownership limit for shareholders from 9.8% to 5.0%, which may hinder capital inflow.
- Legal challenges or actions against the acquisition of shares may arise, complicating the offer process.
DALLAS, May 25, 2022 /PRNewswire/ -- NexPoint Advisors, L.P., investment adviser to the NexPoint Diversified Real Estate Trust ("NXDT" and together with affiliated entities "NexPoint"), today announced the extension of the offering period for its previously announced offer to purchase Shares of Beneficial Interest (the "Shares") of United Development Funding IV ("UDFI" or the "Company") at a price of
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.
NXDT is in the process of converting from an investment company registered under the Investment Company Act of 1940 into a real estate investment trust ("REIT"). In connection with that conversion, NXDT dropped down certain of its investments to a single-member, wholly owned limited liability company subsidiary, NexPoint Real Estate Opportunities ("NREO"), which is reflected as a portfolio company of NXDT. NexPoint Advisors, L.P., external adviser to NXDT and NREO, continues to have investment and voting power over the UDF IV Common Shares. Accordingly, NexPoint continues to beneficially own the UDF IV Common Shares it had previously reported to the SEC on its last Schedule 13D.
On January 8, 2021, UDFI announced that it had reduced the percentage of outstanding Shares that a shareholder may own from
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 JUNE 23, 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
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.
Media Contact
Lucy Bannon
lbannon@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?
What price per share is NexPoint offering for UDFI shares?
What conditions must be met for the NexPoint offer to purchase UDFI shares?
How is NXDT transitioning as a company?
What changes were made to UDFI's shareholder ownership limits?
