N
exPoint Hospitality Trust (NHT) and NexPoint Diversified Real Estate Trust (NXDT) announced the execution of a definitive agreement on November 22, 2024, to merge NHT with entities owned or controlled by NXDT. The merger is expected to be completed in the first quarter of 2025, subject to customary conditions.

    Under the terms of the merger, each NHT unitholder will receive either $0.36 cash per unit or common shares of NXDT equal to the quotient of $0.36 divided by the volume-weighted average price of NXDT common shares quoted on the New York Stock Exchange for the ten trading days prior to closing.

    The proposed price represents a premium of approximately 2300% to the 30-day volume-weighted average price per unit on the TSX Venture Exchange ended November 22, 2024. Unitholders who elect to receive cash will immediately realize a fair value for their investment, while those receiving NXDT common shares will have the opportunity to participate in any increase in value of NHT's assets and NXDT.

    The merger represents the best prospect for maximizing unitholder value over the short to medium term given current and expected macroeconomic conditions in North America. The NHT board of trustees has approved the transaction and recommends that unitholders vote in favor of it, with James Dondero declaring his interest and abstaining from the decision.

    The merger is subject to approval by at least two-thirds of votes cast by unitholders present or represented by proxy at a special meeting. The transaction will be governed by Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions, and customary conditions must be met before closing.

    NHT's units will be delisted from the TSX Venture Exchange upon completion of the merger. Raymond James Limited has entered into a voting and support agreement to support and vote its units in favor of the transaction. The merger agreement provides for representations and warranties, non-solicitation covenants, and a termination fee of $370,000.

    Doane Grant Thornton has provided a fairness opinion that the consideration received by unitholders is fair from a financial point of view. Goodmans LLP and BakerHostetler LLP are acting as legal counsel to NHT and its subsidiaries, while Winston & Strawn LLP represents NXDT and its subsidiaries.