On November 29, 2024, Ready Capital Corporation (NYSE:RC) announced that it had signed an Agreement and Plan of Merger with United Development Funding IV (UDF IV). As per the terms of the Merger Agreement, UDF IV will be merged with and into RC Merger Sub IV, LLC, a wholly owned subsidiary of Ready Capital. This merger will result in UDF IV becoming part of Ready Capital as a wholly owned subsidiary, marking a significant development in the companies’ corporate structures.
Under the Merger Agreement, each common share of UDF IV (excluding any shares held by UDF IV, Ready Capital, Merger Sub, or their subsidiaries) will be converted into 0.416 shares of Ready Capital common stock and a number of contingent value rights (CVRs) based on the Exchange Ratio. The Agreement also includes provisions for the conversion of restricted stock units held by UDF IV shareholders.
Before the Closing of the transaction, UDF IV will make a final cash distribution known as the “Closing Dividend” to its shareholders. The completion of the Merger is subject to various conditions, including obtaining the UDF IV Shareholder Approval, registration and listing of shares, compliance with covenants, and absence of material adverse effects.
The Merger Agreement also includes termination rights for both companies and a ‘no-shop’ provision restricting UDF IV from soliciting competing proposals. UDF IV retains the right to consider a superior proposal under certain conditions and to change its recommendation to shareholders accordingly.
Ready Capital emphasizes that this news release is not an offer to sell securities and urges UDF IV shareholders to carefully review the upcoming registration statement, prospectus, and proxy statement regarding the Merger. Shareholders are advised to stay informed about all updates related to the transaction.
While the forward-looking statements included in this report outline the plans and expectations regarding the Merger, uncertainties beyond the companies’ control could influence the final outcome. Ready Capital assures stakeholders of its commitment to keeping them updated on any developments related to the proposed Merger.
This article summarizes the key details of the Merger Agreement between Ready Capital and United Development Funding IV and its potential implications pending shareholder approvals and other regulatory procedures.
This article was generated by an automated content engine and was reviewed by a human editor prior to publication. For additional information, read Ready Capital’s 8K filing here.
Ready Capital Company Profile
Ready Capital Corporation operates as a real estate finance company in the United States. It operates through two segments: LMM Commercial Real Estate and Small Business Lending. The company originates, acquires, finances, and services lower-to-middle-market (LLM) commercial real estate loans, small business administration (SBA) loans, residential mortgage loans, construction loans, and mortgage-backed securities collateralized primarily by LLM loans, or other real estate-related investments.
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