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

Rhea-AI Summary

NexPoint Advisors announced an extension for its offer to purchase Shares of Beneficial Interest of United Development Funding IV (UDFI) at $1.10 per share. This tender offer, originally set to expire on August 23, 2022, is now extended to September 23, 2022. The offer is contingent upon conditions including the absence of legal challenges and necessary governmental approvals. Additionally, NXDT has transitioned into a real estate investment trust (REIT), having ceased to be an investment company under the Investment Company Act. Shareholders are urged to review the tender offer materials carefully.

Positive

• NXDT successfully converted from an investment company to a real estate investment trust (REIT).
• The extension of the offer provides shareholders with additional time to make decisions regarding their shares.

Negative

• UDFI has reduced the ownership limit for shareholders from 9.8% to 5.0% to challenge the tender offer.
• The offer is contingent upon various conditions that could impede its completion.

DALLAS, Aug. 23, 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 $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, which was scheduled to expire at 12:00 midnight, Eastern Time, at the end of the day on August 23, 2022, is now scheduled to expire at 12:00 midnight, Eastern Time, at the end of the day on September 23, 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.

NXDT has recently completed its conversion 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 heretofore has been reflected as a portfolio company of NXDT in its SEC filings.  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 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 SEPTEMBER 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 diversified REIT that formerly operated as a closed-end fund. The name change became effective on November 8, 2021. On August 28, 2020, shareholders approved the conversion from a closed-end management investment company under the Investment Company Act of 1940 (the "1940 Act") and amended NXDT's fundamental investment policies and restrictions to permit NXDT to operate as a diversified REIT. NXDT completed the repositioning of its investment portfolio sufficient to achieve REIT tax status and operated during its 2021 taxable year, and continues to operate, so that it qualifies for taxation as a REIT. NXDT has also realigned its portfolio so that it is no longer an "investment company" under the 1940 Act. On July 1, 2022, NXDT received an order from the Securities and Exchange Commission (the "SEC") declaring that NXDT  has ceased to be an investment company and that its registration under the 1940 Act is no longer in effect (the "Deregistration Order").

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  

View original content to download multimedia:https://www.prnewswire.com/news-releases/nexpoint-extends-offer-to-purchase-shares-of-united-development-funding-iv-udfi-301610633.html

SOURCE NexPoint Advisors, L.P.

FAQ

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

The new expiration date is September 23, 2022.

What is the purchase price per share in NXDT's offer for UDFI?

The purchase price is $1.10 per share.

What are the conditions for NXDT's offer to purchase shares of UDFI?

Conditions include no legal challenges, necessary governmental approvals, and due diligence by NexPoint.

How has NXDT's structure changed recently?

NXDT has converted from an investment company to a real estate investment trust (REIT).

Why did UDFI reduce the percentage of shares a shareholder can own?

UDFI reduced the percentage to 5.0% to frustrate the tender offer from NXDT.