NexPoint updates on UDF IV proposal and special meeting
NexPoint Real Estate Opportunities, LLC, a subsidiary of NexPoint Diversified Real Estate Trust, has provided an update on the proposed merger between United Development Funding IV (UDF IV) and Ready Capital. The UDF IV shareholders are scheduled to vote on this merger at a Special Meeting on March 4, 2025. NexPoint has expressed concerns about the rejection of its proposal by the UDF IV Board of Trustees without engaging in discussions to ensure the best outcome for shareholders.
Recently, Ready Capital released its Q4 2024 earnings report, which raised doubts about the company’s stability and the potential value that UDF IV shareholders may receive from the Ready Merger. Following this report, Ready Capital’s stock price plummeted significantly by more than 25%. At its lowest trading price, RC’s stock traded at $4.78 per share, equivalent to $1.99 per UDF IV share under the proposed merger. This decline potentially erases over $30 million in value for UDF IV shareholders compared to the original announcement.
It is essential for the UDF IV Board to fulfill its fiduciary duty by re-evaluating the Ready Merger in light of the latest financial information. Considering the substantial loss of value following Ready Capital’s earnings release, the Board should seriously reconsider its decision to reject NexPoint’s proposal swiftly. NexPoint emphasizes the need for the Board to postpone the Special Meeting for a month to engage in detailed discussions with NexPoint and thoroughly evaluate all available options to secure the best interests of shareholders.
NexPoint is of the opinion that its initial proposal was superior considering the market conditions. The recent market activity highlights the urgency for the Board to reconsider and recalibrate its stance on NexPoint’s proposal. Postponing the Special Meeting will allow for a comprehensive assessment of the financial health and stability of Ready Capital, along with the potential consequences for UDF IV shareholders under the proposed merger, following the unsettling earnings report.
To stay informed about developments related to UDF IV, the Ready Merger, and any alternative proposals, shareholders are encouraged to visit udfaccountability.com. By completing the contact form on the website, shareholders can receive regular updates on the ongoing situation and any critical announcements regarding UDF IV and the proposed merger.
NexPoint Real Estate Opportunities, LLC remains committed to advocating for the best interests of UDF IV shareholders and ensuring a fair and transparent evaluation of the proposed transactions.nexPoint Real Estate Opportunities, LLC is a wholly owned subsidiary of NexPoint Diversified Real Estate Trust.