NexPoint Provides Update on UDF IV Proposal and Special Meeting as Ready Capital Earnings Report Heightens Concerns About Proposed Merger
NexPoint has issued an urgent update regarding the proposed merger between United Development Funding IV (UDF IV) and Ready Capital (RC), scheduled for shareholder vote on March 4, 2025. Following Ready Capital's concerning Q4 2024 earnings report, RC's stock price plummeted by over 25%, trading as low as $4.78 per share, which translates to $1.99 per UDF IV share under the merger terms.
The steep decline could potentially erase more than $30 million in value for UDF IV shareholders. NexPoint criticizes the UDF IV Board's hasty rejection of their competing proposal on February 28, 2025, and urges the Board to postpone the Special Meeting by one month to properly evaluate both transactions and Ready Capital's financial stability.
NexPoint ha emesso un aggiornamento urgente riguardo la proposta di fusione tra United Development Funding IV (UDF IV) e Ready Capital (RC), prevista per il voto degli azionisti il 4 marzo 2025. A seguito del preoccupante rapporto sugli utili del Q4 2024 di Ready Capital, il prezzo delle azioni di RC è crollato di oltre il 25%, scambiando a un minimo di $4,78 per azione, il che corrisponde a $1,99 per azione di UDF IV secondo i termini della fusione.
Questo forte calo potrebbe potenzialmente cancellare più di $30 milioni di valore per gli azionisti di UDF IV. NexPoint critica il rifiuto affrettato da parte del Consiglio di Amministrazione di UDF IV della loro proposta concorrente il 28 febbraio 2025, e invita il Consiglio a posticipare la Riunione Straordinaria di un mese per valutare adeguatamente entrambe le transazioni e la stabilità finanziaria di Ready Capital.
NexPoint ha emitido una actualización urgente sobre la propuesta de fusión entre United Development Funding IV (UDF IV) y Ready Capital (RC), programada para la votación de los accionistas el 4 de marzo de 2025. Tras el preocupante informe de ganancias del cuarto trimestre de 2024 de Ready Capital, el precio de las acciones de RC se desplomó más del 25%, cotizando tan bajo como $4.78 por acción, lo que se traduce en $1.99 por acción de UDF IV bajo los términos de la fusión.
Esta fuerte caída podría eliminar más de $30 millones en valor para los accionistas de UDF IV. NexPoint critica el rechazo apresurado del Consejo de Administración de UDF IV a su propuesta competitiva el 28 de febrero de 2025, y urge al Consejo a posponer la Reunión Especial por un mes para evaluar adecuadamente ambas transacciones y la estabilidad financiera de Ready Capital.
NexPoint는 United Development Funding IV (UDF IV)와 Ready Capital (RC) 간의 제안된 합병에 대한 긴급 업데이트를 발표했습니다. 주주 투표는 2025년 3월 4일로 예정되어 있습니다. Ready Capital의 우려스러운 2024년 4분기 실적 발표 이후, RC의 주가는 25% 이상 폭락하여 주당 $4.78까지 떨어졌으며, 이는 합병 조건에 따라 UDF IV 주당 $1.99에 해당합니다.
이 급격한 하락은 UDF IV 주주에게 $30백만 이상의 가치를 지울 수 있습니다. NexPoint는 2025년 2월 28일 UDF IV 이사회의 경쟁 제안을 서두르지 않고 거부한 것을 비판하며, 이사회에 두 거래와 Ready Capital의 재정 안정성을 적절히 평가하기 위해 특별 회의를 한 달 연기할 것을 촉구합니다.
NexPoint a émis une mise à jour urgente concernant la fusion proposée entre United Development Funding IV (UDF IV) et Ready Capital (RC), prévue pour le vote des actionnaires le 4 mars 2025. Suite au rapport de bénéfices préoccupant de Ready Capital pour le quatrième trimestre 2024, le prix de l'action de RC a chuté de plus de 25%, atteignant un minimum de 4,78 $ par action, ce qui correspond à 1,99 $ par action UDF IV selon les termes de la fusion.
Cette forte baisse pourrait potentiellement effacer plus de 30 millions de dollars de valeur pour les actionnaires de UDF IV. NexPoint critique le rejet hâtif par le Conseil d'Administration de UDF IV de leur proposition concurrente le 28 février 2025 et exhorte le Conseil à reporter la Réunion Spéciale d'un mois pour évaluer correctement les deux transactions et la stabilité financière de Ready Capital.
NexPoint hat ein dringendes Update zur vorgeschlagenen Fusion zwischen United Development Funding IV (UDF IV) und Ready Capital (RC) herausgegeben, die für die Abstimmung der Aktionäre am 4. März 2025 geplant ist. Nach dem besorgniserregenden Quartalsbericht von Ready Capital für das vierte Quartal 2024 fiel der Aktienkurs von RC um über 25% und handelte zeitweise bei $4,78 pro Aktie, was unter den Fusionsbedingungen $1,99 pro UDF IV-Aktie entspricht.
Der steile Rückgang könnte potenziell mehr als $30 Millionen an Wert für die UDF IV-Aktionäre auslöschen. NexPoint kritisiert die hastige Ablehnung des konkurrierenden Vorschlags durch den UDF IV Vorstand am 28. Februar 2025 und fordert den Vorstand auf, die Sonderversammlung um einen Monat zu verschieben, um beide Transaktionen und die finanzielle Stabilität von Ready Capital angemessen zu bewerten.
- NexPoint offers competing proposal as alternative to Ready Capital merger
- Ready Capital stock dropped over 25% post Q4 2024 earnings
- Potential $30M+ value loss for UDF IV shareholders under merger terms
- RC stock low of $4.78 equals only $1.99 per UDF IV share
Insights
The emerging battle over United Development Funding IV (UDF IV) highlights significant shareholder value concerns in merger arbitrage situations. Ready Capital's troubling Q4 2024 earnings triggered a
This precipitous decline potentially erases over
The timing is particularly critical with the shareholder vote scheduled for March 4th. The UDF IV Board's decision to reject NexPoint's proposal without substantive engagement raises serious corporate governance questions about their commitment to maximizing shareholder value. Their fiduciary responsibility requires thorough evaluation of all viable alternatives, especially when market developments materially impact transaction values.
This situation demonstrates the inherent risks in stock-based merger transactions where value can evaporate quickly due to earnings disappointments. Ready Capital's earnings problems likely signal deeper operational challenges that could further erode value during post-merger integration. For UDF IV shareholders, postponing the vote would provide necessary time to properly evaluate the competing offers against Ready Capital's deteriorating financial position.
Steep Decline in RC Stock Price Following Q4 2024 Earnings Release Has Potential to Erase More Than
NexPoint Urges Board to Reconsider Hasty Rejection of NexPoint's Proposal and Postpone Special Meeting to Properly Evaluate Transactions on Behalf of Shareholders
The market's reaction reflected these concerns, with RC's stock price experiencing a steep decline following today's earnings release, closing down more than
Original Announcement* | Today** | |
Ready Capital Share Price | ||
Price Per UDF IV Share | ||
Implied Value |
*Based on Ready Capital's closing share price on November 29, 2024 **Based on lowest trading price on March 3, 2025 |
This decline erases significant value from the Ready Merger. The Board has a fiduciary duty to act in the interests of UDF IV shareholders. This includes re-evaluating the Ready Merger in light of new financial information and considering alternative proposals that better serve shareholders.
While NexPoint believes it submitted a superior proposal under the original purported value of the Ready Merger, today's market activity makes clear that the Board's hasty rejection of NexPoint's proposal is not in the best interest of shareholders. NexPoint thus urges the Board to withdraw its rejection and postpone the Special Meeting for one month to engage with NexPoint and properly evaluate the transactions on behalf of shareholders. This would also allow time for the Board to further evaluate the health and stability of Ready Capital—and the potential impact to UDF IV shareholders under the Ready Merger—following its troubling earnings report.
For More Information:
NexPoint encourages shareholders to visit udfaccountability.com for more information. Shareholders can complete the contact form on the site to receive ongoing updates about UDF IV, the Ready Merger, and any competing proposals.
About NexPoint
NexPoint Real Estate Opportunities, LLC is a wholly owned subsidiary of NexPoint Diversified Real Estate Trust, Inc. (NYSE: NXDT), a diversified real estate investment trust externally advised by an affiliate of NexPoint Advisors, L.P.
NexPoint Advisors, L.P. is an SEC-registered adviser on the NexPoint alternative investment platform. For more information visit www.nexpoint.com
IMPORTANT INFORMATION
This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements regarding beliefs about the ultimate economic consequences of the RC Merger and NexPoint's proposed transaction and other statements identified by words such as "expect," "intend," "believe," the negative version of these words and similar expressions that do not relate solely to historical matters. Forward-looking statements are based on NXDT's current expectations and assumptions regarding capital market conditions, NXDT's business, the economy and other future conditions. Forward-looking statements are subject to risks, uncertainties and assumptions and may be affected by known and unknown risks, trends, uncertainties and factors that are beyond NXDT's control. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated or projected. Important factors that could cause actual results to differ materially from those in the forward-looking statements include regional, national or global political, economic, business, competitive, market and regulatory conditions, and those described in greater detail in our filings with the Securities and Exchange Commission, particularly those described in NXDT's Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. Readers should not place undue reliance on any forward-looking statements and are encouraged to review the NXDT's Annual Report on Form 10-K and other filings with the SEC for a more complete discussion of risks and other factors that could affect any forward-looking statement. Any forward-looking statement made in this press release speaks only as of the date on which it is made. NXDT undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law.
CONTACT INFORMATION
For Additional Information/Updates on UDF IV
Website: www.udfaccountability.com
Email: udfinvestors@nexpoint.com
Media Contacts
Lucy Bannon (NexPoint): lbannon@nexpoint.com
Paul Caminiti/Pamela Greene (Reevemark): nexpointteam@reevemark.com
NexPoint Investor Relations
Kristen Thomas: ir@nexpoint.com
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SOURCE NexPoint Advisors, L.P.
FAQ
How much value could UDF IV shareholders lose after Ready Capital's stock price drop?
When is the UDF IV Special Meeting scheduled for the Ready Capital merger vote?
What happened to Ready Capital's stock price after their Q4 2024 earnings report?
What is NexPoint requesting from the UDF IV Board regarding the merger?
