NexPoint extends offer to exchange common shares for preferreds, cash

By Taylor Fox

New York, Dec. 11 – NexPoint Strategic Opportunities Fund announced it received significant participation in its tender offer to exchange up to 15 million shares of its common stock for consideration consisting of 20% cash and 80% newly issued 5.5% series A cumulative preferred shares.

NexPoint had received tenders for $121 million of common shares, or 81% of the offer, according to a news release.

NexPoint said it believes the initial response to the exchange offer indicates strong shareholder interest, and therefore has decided to extend the offer to give shareholders additional time to participate.

The exchange offer will now expire at 5 p.m. ET Jan. 4.

As previously reported, NexPoint will purchase common shares at a maximum purchase price of $150 million in exchange for consideration of 20% cash and 80% preferreds, 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.

American Stock Transfer & Trust Company, LLC is the depositary.

NexPoint Strategic Opportunities is a closed-end fund managed by NexPoint Advisors, LP that is in the process of converting to a diversified real estate investment fund. The company is based in Dallas.

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