GRAPEVINE, Texas, March 18, 2021 (GLOBE NEWSWIRE) — United Development Funding IV (“UDF IV” or the “Trust”) announced that it recommends Trust shareholders reject the third extended unsolicited tender offer made by hedge fund NexPoint Strategic Opportunities Fund (“NexPoint”) to purchase all Trust common shares (the “Shares”) for $1.10 per share (the “Tender Offer”).
Shareholders should be aware that they are not required to tender any Shares to NexPoint. To reject the Tender Offer, a shareholder should simply ignore it. A shareholder that has already agreed to tender its Shares pursuant to the Tender Offer may withdraw any tender of shares up until April 13, 2021 (as described in the Tender Offer materials). A copy of this press release will be posted to the Trust’s website at www.udfiv.com. The Trust requests that a copy of this press release also be included with all distributions of materials relating to the Tender Offer.
The Trust’s Board of Trustees (the “Board”) has reviewed the terms and conditions of the third extended Tender Offer, considered other information relating to the Trust’s portfolio of assets, current financial condition and future opportunities and evaluated various other factors it deemed relevant, such as its knowledge of NexPoint and its affiliates, including NexPoint Advisors, L.P., Highland Capital Management, L.P. (“Highland”) and NexPoint’s portfolio manager, James Dondero (collectively, “NexPoint/Dondero”). As explained in the Trust’s press releases dated December 17, 2020, January 8, 2021, January 19, 2021 and February 16, 2021 the Board believes that NexPoint’s extended tender offer price of $1.10 per share represents a substantial discount to the current value of the Trust. In addition, the Board has serious concerns that the principal interests of NexPoint/Dondero and their affiliates in taking over the Trust may be to shield the participants in the illegal short and distort fraud scheme perpetrated against the Trust by notorious hedge fund manager J. Kyle Bass. These concerns and the Board’s additional reasons for recommending that shareholders reject the Tender Offer are described further in the press releases mentioned above, which are available at www.udfiv.com.
The Board’s concerns are also based on more recent information, including Nexpoint Advisors, L.P. and NexPoint’s opposition to, and refusal to comply with, subpoenas issued to them in the civil litigation brought by the Trust against J. Kyle Bass, Hayman Capital Management, L.P. and their affiliated funds, as well as the fact that the Trust has issued a subpoena to, but has been unable to effect service on, James Dondero.
About United Development Funding IV
United Development Funding IV is a Maryland real estate investment trust. UDF IV was formed primarily to generate current interest income by investing in secured loans and producing profits from investments in residential real estate. Additional information about UDF IV can be found on its website at www.udfiv.com. UDF IV may disseminate important information regarding its operations, including financial information, through social media platforms such as Twitter, Facebook and LinkedIn.
Cautionary Note Regarding Forward-Looking Statements
This press release contains forward-looking statements relating to United Development Funding IV and the Tender Offer that are based on management’s current expectations and estimates and are not guarantees of future performance or future events. Such forward-looking statements generally can be identified by our use of forward-looking terminology such as “may,” “will,” “expect,” “intend,” “anticipate,” “estimate,” “believe,” or other similar words. Readers should be aware that there are various factors, many of which are beyond the Trust’s control, which could cause actual results to differ materially from any forward-looking statements made in this correspondence. Accordingly, readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this correspondence. Forward-looking statements in this document speak only as of the date on which such statements were made, and the Trust undertakes no obligation to update any such statements that may become untrue because of subsequent events.
