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NexPoint offers to exchange 15 million shares for cash, preferreds
By Taylor Fox
New York, Oct. 30 – NexPoint Strategic Opportunities Fund is offering cash and preferred shares in the company’s tender offer for up to 15 million shares of the company’s common stock, according to a news release.
NexPoint will purchase common shares at a maximum purchase price of $150 million in exchange for consideration of 20% cash and 80% newly issued shares of the company’s 5.5% series A cumulative preferred shares, valued at their liquidation preference $25.00 per share.
The offer will be conducted through a modified Dutch auction.
For a shareholder choosing to participate in the exchange offer, this procedure allows the shareholder to select a price between $10.00 and $12.00 per common share at which they are willing to sell their shares. After all tendering shareholders indicate their respective sale prices, the company will pay the lowest price indicated that will permit it to purchase as many shares as possible, up to the maximum purchase price.
Dividends and distributions on the preferred shares will be payable quarterly on March 31, June 30, Sept. 30 and Dec. 31 of each year, beginning with the first payment on March 31, 2021.
The purpose of the exchange offer is to provide shareholders with an opportunity to exchange common shares at a premium to the current market price, while increasing the NAV per common share for shareholders who choose not to participate, or not fully participate, in the exchange offer, the company said.
The offer will expire at 5 p.m. ET on Dec. 10.
The real estate investment trust is affiliated with Highland Capital, a Dallas-based investment management firm.
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