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 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.