NexPoint Strategic Opportunities Fund Announces Offer to Purchase Up to All Shares of United Development Funding IV (UDFI)

Rhea-AI Summary

NexPoint Strategic Opportunities Fund (NYSE:NHF) has announced its intention to purchase all Shares of Beneficial Interest from United Development Funding IV (UDFI) at $1.10 per share. This offer aims to enhance NHF's holdings while providing liquidity to UDFI shareholders, as they have faced limited trading opportunities since February 2016. NHF, the largest shareholder of UDFI, emphasizes long-term value creation despite the recent delisting and deregistration struggles of UDFI. Shareholders are encouraged to carefully review the Offer documents, with the Offer expiring on January 13, 2021.

Positive

• NHF is increasing its ownership in UDFI, aiming for long-term value creation.
• The Offer provides liquidity for UDFI shareholders after years of limited opportunities.

Negative

• UDFI shares have been halted from trading since February 2016.
• The SEC revoked UDFI's registration, complicating shareholder transactions.

DALLAS, Dec. 14, 2020 /PRNewswire/ -- NexPoint Strategic Opportunities Fund (NYSE:NHF) ("NHF") today announced the commencement of an 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 Tender Offer Documents are available at www.UDFITenderOffer.com, or from the information agent for the Offer, as discussed below.

NHF is seeking to increase its ownership in UDFI, while providing liquidity to shareholders who choose to participate.

NHF believes it is the largest shareholder of UDFI. Through the Offer, NHF is seeking to increase its ownership in the Company, while also providing liquidity to shareholders who choose to participate. In the last five years, there have been limited opportunities for shareholders to sell UDFI Shares. Trading in the Shares on The Nasdaq Stock Market LLC ("Nasdaq") has been halted since February 2016. In May 2017, Nasdaq announced that it would delist the Shares (the "Delisting"). In August 2020, the Securities and Exchange Commission ("SEC") revoked the registration of all classes of registered securities of UDFI (the "Deregistration"). The Delisting and Deregistration presented challenges to shareholders interested in selling UDFI Shares. Adding to these challenges, there has been limited information regarding the financial performance of UDFI available to UDFI's shareholders since November 2015. Despite the limited information on the Company, NHF commenced the Offer in an effort to increase its investment in UDFI and encourage value creation over the long term, while providing immediate liquidity for shareholders interested in selling their Shares.

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 NHF, otherwise materially adversely affecting the Company; (ii) NHF shall have received all required governmental approvals, if any, for the Offer; (iii) NHF 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) NHF 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.

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, NEW YORK CITY TIME, AT THE END OF THE DAY ON JANUARY 13, 2021, UNLESS THE OFFER IS EXTENDED OR EARLIER TERMINATED.

About the NexPoint Strategic Opportunities Fund (NHF)

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 Company is in the process of realigning its portfolio so that it is no longer an "investment company" under the Investment Company Act of 1940 (the "1940 Act") and continues to expect the Company to be able to transition its investment portfolio sufficient to qualify as a REIT for tax purposes by the first quarter of 2021 and to apply to the Securities and Exchange Commission (the "SEC") for an order under the 1940 Act declaring that the Company has ceased to be an investment company (the "Deregistration Order") in the first half of 2021.

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

About NexPoint Advisors, L.P.

NexPoint Advisors, L.P. (the "Investment Adviser") 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.nexpointgroup.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
mediarelations@nexpointadvisors.com 

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SOURCE NexPoint Strategic Opportunities Fund

FAQ

What is the NexPoint Strategic Opportunities Fund's current offer for UDFI shares?

NexPoint Strategic Opportunities Fund is offering $1.10 per share for all Shares of UDFI.

When does the offer from NHF for UDFI shares expire?

The offer will expire at 12:00 midnight New York City time on January 13, 2021.

Why has trading in UDFI shares been halted?

Trading in UDFI shares has been halted since February 2016 due to a pending delisting by Nasdaq.

What challenges do UDFI shareholders face in selling shares?

Shareholders have faced challenges since UDFI's shares were delisted and deregistered by the SEC, limiting selling opportunities.

Is NHF the largest shareholder of UDFI?

Yes, NHF believes it is the largest shareholder of UDFI.