NexPoint Diversified Real Estate Trust (NXDT, Financials) announced it will acquire NexPoint Hospitality Trust (NHT.U, Financials) in a merger agreement that will see the latter dissolved.
The deal states that subsidiary companies of NexPoint Hospitality Trust will become corporations owned or managed by NexPoint Diversified Real Estate Trust.
Based on the volume-weighted average price of the shares over the 10 trading days prior the transaction close, NexPoint Hospitality Trust unitholders will get either $0.36 in cash per unit or NexPoint Diversified Real Estate Trust common shares equivalent to $0.36 under the terms of the deal. Subject to regulatory and unitholder clearance, the deal is scheduled for completion in the first quarter of 2025. NexPoint Hospitality Trust units will be delisted from the TSX Venture Exchange after completed.
As of Nov. 22, the proposed deal offers a noteworthy premium of around 2,300% above NexPoint Hospitality Trust's 30-day volume-weighted average price of $0.015. While those choosing to receive shares will be exposed to NexPoint Diversified Real Estate Trust's larger asset portfolio, which includes greater trading volumes and possible future value increase, unitholders choosing cash will assure instantaneous liquidity.
Customary assurances, guarantees, and non-solicitation rules abound throughout the merger agreement. With a five-business-day term given NexPoint Diversified Real Estate Trust to match any competing bids, a clause lets NexPoint Hospitality Trust take consideration for outstanding proposals. Should the deal be canceled under some circumstances, a termination charge of $370,000 might be due.
The deal has been authorized by the board of trustees of NexPoint Hospitality Trust, omitting James Dondero who abstained because of a conflict of interest. The board advises unitholders to support the agreement at a planned special meeting. Apart from NexPoint Diversified Real Estate Trust, Dondero, and associated companies, the purchase also needs approval from majority minority owners.
