NexPoint Submits Competing Proposal for UDF IV with Improved Shareholder Economics, Awaits Engagement from UDF IV Board of Trustees
NexPoint has submitted a competing proposal to UDF IV's Board of Trustees, challenging the planned merger with Ready Capital (RC). The proposal offers improved shareholder economics compared to the Ready Merger scheduled for March 4, 2025.
Key advantages of NexPoint's proposal include:
- Higher pre-closing dividend through enhanced balance sheet distributions
- 100% shareholder entitlement to CVR loan proceeds (vs. Ready's complex structure with shareholder benefits)
- Intent to recover improper indemnification payments with 100% of net recoveries going to shareholders
NexPoint, a major shareholder, will not vote at the March 4 Special Meeting and urges a one-month postponement for proper proposal evaluation. The company calls for shareholders to withhold voting until the UDF IV Board fully assesses their proposal.
NexPoint ha presentato una proposta concorrente al Consiglio di Amministrazione di UDF IV, contestando la fusione pianificata con Ready Capital (RC). La proposta offre migliori condizioni economiche per gli azionisti rispetto alla fusione con Ready, prevista per il 4 marzo 2025.
I principali vantaggi della proposta di NexPoint includono:
- Un dividendo pre-chiusura più elevato grazie a distribuzioni migliorate del bilancio
- Diritti al 100% per gli azionisti sui proventi del prestito CVR (rispetto alla complessa struttura di Ready con benefici per gli azionisti)
- Intenzione di recuperare pagamenti di indennizzo impropri con il 100% dei recuperi netti destinati agli azionisti
NexPoint, un azionista di maggioranza, non parteciperà al voto durante la Riunione Straordinaria del 4 marzo e chiede un rinvio di un mese per una corretta valutazione della proposta. L'azienda invita gli azionisti a astenersi dal votare fino a quando il Consiglio di Amministrazione di UDF IV non avrà valutato completamente la loro proposta.
NexPoint ha presentado una propuesta competidora a la Junta de Fideicomisarios de UDF IV, desafiando la fusión planificada con Ready Capital (RC). La propuesta ofrece mejores condiciones económicas para los accionistas en comparación con la fusión con Ready programada para el 4 de marzo de 2025.
Las principales ventajas de la propuesta de NexPoint incluyen:
- Un dividendo previo al cierre más alto a través de distribuciones mejoradas del balance
- Derecho del 100% de los accionistas a los ingresos del préstamo CVR (frente a la compleja estructura de Ready con beneficios para los accionistas)
- Intención de recuperar pagos de indemnización impropios, con el 100% de las recuperaciones netas destinadas a los accionistas
NexPoint, un accionista mayoritario, no votará en la Reunión Especial del 4 de marzo y pide un aplazamiento de un mes para una evaluación adecuada de la propuesta. La empresa solicita a los accionistas que se abstengan de votar hasta que la Junta de UDF IV evalúe completamente su propuesta.
NexPoint는 UDF IV의 이사회에 경쟁 제안을 제출하여 Ready Capital (RC)와의 계획된 합병에 도전하고 있습니다. 이 제안은 2025년 3월 4일로 예정된 Ready 합병에 비해 주주에게 더 나은 경제적 조건을 제공합니다.
NexPoint 제안의 주요 장점은 다음과 같습니다:
- 강화된 재무제표 분배를 통한 높은 폐쇄 전 배당금
- CVR 대출 수익에 대한 100% 주주 권리 (Ready의 복잡한 구조와 주주 혜택에 비해)
- 부적절한 면책금 지급을 회수하려는 의도, 순회수의 100%가 주주에게 돌아감
NexPoint는 주요 주주로서 3월 4일 특별 회의에서 투표하지 않으며, 적절한 제안 평가를 위해 한 달의 연기를 촉구합니다. 회사는 UDF IV 이사회가 그들의 제안을 완전히 평가할 때까지 주주들이 투표를 보류할 것을 요청합니다.
NexPoint a soumis une proposition concurrente au Conseil des fiduciaires de UDF IV, remettant en question la fusion prévue avec Ready Capital (RC). La proposition offre de meilleures conditions économiques pour les actionnaires par rapport à la fusion avec Ready prévue pour le 4 mars 2025.
Les principaux avantages de la proposition de NexPoint comprennent :
- Un dividende avant clôture plus élevé grâce à des distributions améliorées du bilan
- Droit de 100 % des actionnaires sur les produits du prêt CVR (contre la structure complexe de Ready avec des avantages pour les actionnaires)
- Intention de récupérer des paiements d'indemnisation inappropriés, avec 100 % des récupérations nettes revenant aux actionnaires
NexPoint, un actionnaire majoritaire, ne votera pas lors de la réunion spéciale du 4 mars et demande un report d'un mois pour une évaluation appropriée de la proposition. L'entreprise appelle les actionnaires à s'abstenir de voter jusqu'à ce que le Conseil d'UDF IV évalue pleinement leur proposition.
NexPoint hat dem Vorstand von UDF IV einen konkurrierenden Vorschlag unterbreitet, der die geplante Fusion mit Ready Capital (RC) in Frage stellt. Der Vorschlag bietet im Vergleich zur für den 4. März 2025 geplanten Fusion mit Ready verbesserte Bedingungen für die Aktionäre.
Die wichtigsten Vorteile des Vorschlags von NexPoint sind:
- Höhere Dividende vor dem Abschluss durch verbesserte Bilanzverteilungen
- 100%ige Anspruchsberechtigung der Aktionäre auf die Erlöse aus dem CVR-Darlehen (im Gegensatz zu Readys komplexer Struktur mit Aktionärsvorteilen)
- Absicht, unrechtmäßige Entschädigungszahlungen zurückzufordern, wobei 100% der Netto-Rückforderungen den Aktionären zugutekommen
NexPoint, ein Hauptaktionär, wird bei der Sonderversammlung am 4. März nicht abstimmen und fordert eine einmonatige Verschiebung zur ordnungsgemäßen Bewertung des Vorschlags. Das Unternehmen fordert die Aktionäre auf, ihre Stimmen zurückzuhalten, bis der UDF IV Vorstand ihren Vorschlag vollständig bewertet hat.
- Higher pre-closing dividend distribution proposed
- 100% of CVR loan proceeds to shareholders vs. Ready's 60%
- Potential recovery of improper indemnification payments for shareholder benefit
- Current board showing lack of engagement with major shareholder
- Existing governance issues including fraud and disclosure violations
- Persistent illiquidity problems
Insights
NexPoint has launched a last-minute competing bid for UDF IV just days before shareholders were scheduled to vote on a merger with Ready Capital on March 4. This development introduces significant uncertainty into what appeared to be a settled transaction.
NexPoint's proposal claims three key economic advantages over the Ready Capital deal:
- Higher pre-closing dividend distributions from UDF IV's balance sheet
- 100% shareholder entitlement to Contingent Value Rights loan recoveries versus Ready Capital's structure where shareholders only receive
60% of recoveries after Ready recovers$13.3 million (with potential recoveries estimated at up to$20 million ) - Cessation and potential recovery of indemnification payments to UDF IV's former management team (who are described as "imprisoned"), with all recoveries flowing to shareholders
The competing bid highlights serious governance concerns at UDF IV, with NexPoint referencing fraud, disclosure violations, poor performance, and persistent illiquidity. The imprisoned management reference indicates significant legal issues in UDF IV's history that have apparently resulted in ongoing indemnification payments that NexPoint proposes to terminate.
As one of UDF IV's largest shareholders, NexPoint is refusing to vote at the March 4 meeting and is urging a one-month postponement to allow proper evaluation of their proposal. This creates a tactical dilemma for UDF IV's Board - proceed with the Ready Capital vote without one of their largest shareholders participating, or delay to consider an alternative that claims to offer better economics.
For UDF IV shareholders, this development introduces both opportunity and uncertainty. The competing bid may create leverage to improve the Ready Capital offer or provide a superior alternative, but also risks delaying liquidity if the current process is extended or derailed.
Implores UDF IV Board to Postpone March 4 Special Meeting for One Month to Engage with NexPoint and Appropriately Evaluate Proposal
NexPoint Will Not Vote at Special Meeting Without Due Consideration of Proposal
The confidential proposal submitted by NexPoint mirrors many elements of the Ready Merger but provides shareholders with superior economic terms, including enhanced balance sheet distributions, full entitlement to Contingent Value Rights ("CVR") loan proceeds, and potentially large indemnification reimbursements. Specifically, NexPoint's offer contemplates balance sheet distributions that it believes will provide shareholders with a higher pre-closing dividend than the Ready Merger. Shareholders would also receive
In connection with the proposal, NexPoint provided the following comment:
"Given the indefensible lack of engagement by the UDF IV Board with one of its largest shareholders, NexPoint will not vote at the March 4 Special Meeting on the proposed Ready Capital transaction. We implore UDF IV to postpone the Meeting by one month to properly evaluate our superior proposal, which offers a better economic outcome for shareholders and would finally end the litany of governance failures at UDF IV, including fraud, disclosure violations, poor performance, and persistent illiquidity. We urge the UDF IV Board to give our proposal full consideration consistent with its fiduciary duty, and we hope to engage in meaningful discussions expeditiously."
NexPoint asks shareholders to take no voting action until the UDF IV Board has fully assessed NexPoint's proposal and engaged meaningfully in discussions with NexPoint and encourages the Board to postpone the upcoming Special Meeting regarding the proposed Ready Merger until it has had the opportunity to do so. Shareholders who have already cast their vote may withdraw their vote by reaching out to their broker.
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 NexPoint's beliefs about the ultimate amount of any pre-closing dividend and other economic consequences of the proposed transaction for UDF IV's shareholders 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
What are the key differences between NexPoint's proposal and the Ready Capital merger for UDF IV shareholders?
When is the UDF IV Special Meeting scheduled for the Ready Capital merger vote?
How much could shareholders potentially recover from CVR loans under the Ready Capital merger?
What action is NexPoint recommending to UDF IV shareholders regarding the March 2025 vote?
