Transcontinental Realty Investors, Inc. Tender Offer for up to 100,000 Outstanding Shares of Common Stock of Income Opportunity Realty Investors, Inc.

Rhea-AI Summary

Transcontinental Realty Investors (NYSE:TCI) has announced a cash tender offer to purchase up to 100,000 outstanding shares of Income Opportunity Realty Investors (NYSE American:IOR) at $18.00 per share in cash. The offer aims to increase TCI's current ownership stake, which is already over 80% of IOR common stock.

The tender offer begins December 16, 2024, and expires on January 15, 2025, at 5:00 PM New York time, unless extended. The offer's completion requires a minimum tender of 49,353 shares. IOR's Board of Directors, who are also TCI directors, have made no recommendation to shareholders regarding the tender offer. Following the completion, IOR stock will continue to be listed on NYSE American Exchange with no changes to management or operations.

Positive

• Offers shareholders a clear exit opportunity at $18.00 per share in cash
• Maintains NYSE American Exchange listing post-tender offer
• No planned changes to management or operations, ensuring business continuity

Negative

• Board of Directors made no recommendation to shareholders
• Potential conflict of interest as IOR directors are also TCI directors
• May reduce IOR's public float and stock liquidity

Insights

Financial Analyst

This tender offer by TCI to acquire up to 100,000 shares of IOR at $18.00 per share represents a strategic move to increase its already substantial ownership position above 80%. The minimum tender condition of 49,353 shares suggests a calculated approach to strengthen control while maintaining NYSE American listing requirements. The offer price provides liquidity to minority shareholders at the same price as recent repurchase programs, indicating fair treatment of smaller investors. Notably, the board's neutral stance, while composed of overlapping directors, appropriately addresses potential conflicts of interest. The transaction value could reach up to $1.8 million if fully subscribed, a manageable investment for TCI given its market cap of $243.5 million.

Legal Expert

The tender offer structure demonstrates careful compliance with SEC regulations, particularly regarding disclosure requirements and timing protocols. The specified extension notification process and clear expiration timeline align with regulatory standards. The board's decision to make no recommendation, given the overlapping directorships, reflects proper corporate governance practices in managing potential conflicts of interest. The maintenance of NYSE American listing post-transaction indicates compliance with continued listing requirements. The absence of a dealer manager and soliciting dealer fees suggests a straightforward, cost-efficient approach to the tender process.

Target Stockholders to Receive $18.00 Per Share in Cash

DALLAS--(BUSINESS WIRE)-- Transcontinental Realty Investors, Inc. (“NYSE:TCI”) is commencing today a cash tender offer to purchase up to 100,000 outstanding shares of common stock of Income Opportunity Realty Investors, Inc. (“NYSE American:IOR”). Upon the successful closing of the tender offer, stockholders of IOR will receive $18.00 in cash for each share of IOR common stock validly tendered and not validly withdrawn in the offer, without interest and less any applicable withholding taxes.

The tender offer is being made pursuant to an Offer to Purchase, to be dated December 16, 2024 and in connection with TCI’s intention to increase its current over 80% ownership investment of IOR common stock.

The Board of Directors of IOR, each of which is also a director of TCI, has made no recommendation to IOR stockholders as to whether to tender shares in the offer. The decision of whether to tender is wholly voluntary on the part of IOR Stockholders and is being made by TCI to give the IOR Stockholders the opportunity to obtain the same price as those who have recently sold Shares to IOR under its repurchase program.

The tender offer is scheduled to expire at 5:00 pm, Local New York City time, on Wednesday, January 15, 2025, unless the tender offer is extended in accordance with the applicable rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). If the tender offer is extended, TCI will inform the Depositary for the offer and will make a public announcement of the extension not later than 9:00 A.M., New York City time, on the next business day after the previously scheduled expiration date.

The consummation of the tender offer is conditioned on the tender of at least 49,353 shares of IOR common stock and other customary conditions that are specified in the offer documents. Following completion of the tender offer TCI expects that IOR common stock will continue to still be listed on the NYSE American Exchange and that there will be no change in the management or operations of IOR.

The information agent for the tender offer is D. F. KING & Co. Inc. The Depositary for the tender offer is EQUINITI TRUST COMPANY LLC. There is no dealer manager for the tender offer and no soliciting dealer fees will be paid in the tender offer.

About Transcontinental Realty Investors, Inc.

Transcontinental Realty Investors, Inc., a Nevada corporation is a Dallas based real estate investment company holding a diverse portfolio of equity real estate located across the U.S., including office buildings, multifamily and developed and undeveloped land. The company invests in real estate through direct ownership, leases and partnerships and invests in mortgage loans on real estate. The company also holds mortgage receivables. For more information, visit the website at www.transconrealty-invest.com.

About Income Opportunity Realty Investors, Inc.

Income Opportunity Realty Investors, Inc., a Dallas based real estate investment company, currently holds a portfolio of notes receivable. The company also invests in real estate through direct equity ownership and partnerships. For more information, visit the website at www.incomeopp-realty.com.

Important Information about the Tender Offer

This press release is for informational purposes only and does not constitute an offer to purchase shares of IOR common stock, a solicitation to sell such shares or a solicitation/recommendation statement under the rules and regulations of the SEC. The tender offer is being made pursuant to a Tender Offer Statement on Schedule TO (including the Offer to Purchase, Letter of Transmittal and related Tender Offer documents) which will be filed by the Offeror with the SEC. These documents contain important information and stockholders of IOR are strongly advised to carefully read these documents in their entirety before making any decision regarding tendering their shares. The Offer Purchase and certain other tender offer documents, will be made available to all stockholders of IOR at no expense to them. These documents may be obtained at no charge at the SECs website at www.sec.gov. The Tender Offer Statement and related materials may also be obtained at no charge by directing a request by mail to the information agent for the Tender Offer, D.F. KING & Co., Inc., 48 Wall Street, 22^nd Floor, New York, NY, 10005, by calling toll free (800) 431-9643, or by email (ior@dfking.com).

Cautionary Statements

Statements in this press release that are not historical, including statements regarding TCI’s beliefs, expectations, and strategies constitute “forward-looking statements” within the meaning of the federal securities laws. These statements are subject to risk and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements. Important factors that could cause the differences are discussed in TCI’s reports on Form 10-Q, 10-K and 8-K that TCI periodically files with the SEC. These factors include TCI’s revenue and expenses, TCI’s capital needs, TCI’s dependence on significant matters, risks that TCI may incur significant costs related to certain insurance retention levels. TCI does not undertake to update any forward-looking statements in this press release. Copies of TCI’s SEC filings, including its annual report on Form 10-K and quarterly reports on Form 10-Q may be obtained by contacting www.sec.gov or at the SEC Filing Section of TCI’s website at www.transconrealty-invest.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20241216917122/en/

Transcontinental Realty Investors, Inc.

Investor Relations

Erik Johnson (469) 522-4200

investor.relations@transconrealty-invest.com

Source: Transcontinental Realty Investors, Inc.

FAQ

What is the price per share offered in TCI's tender offer for IOR stock?

TCI is offering $18.00 in cash per share for IOR common stock.

When does TCI's tender offer for IOR shares expire?

The tender offer expires on January 15, 2025, at 5:00 PM New York time, unless extended.

How many IOR shares is TCI looking to purchase in the tender offer?

TCI is looking to purchase up to 100,000 outstanding shares of IOR common stock.

What is the minimum number of shares required for TCI's tender offer to be completed?

The tender offer requires a minimum of 49,353 shares to be tendered for completion.

Will IOR remain listed on NYSE American Exchange after TCI's tender offer?

Yes, IOR will continue to be listed on the NYSE American Exchange after the tender offer completion.