TCI Transcontinental Realty Investment Inc

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

SCHEDULE TO

TENDER OFFER STATEMENT UNDER SECTION 14(D)A(1) OR SECTION 13(E)(1) OF THE

SECURTIES EXCHANGES ACT OF 1934

(AMENDMENT NO. 2 )

 

 

INCOME OPPORTUNITY REALTY INVESTORS, INC.

(Name of Subject Company)

 

 

TRANSCONTINENTAL REALTY INVESTORS, INC.

(Offeror)

(Names of Filing Persons)

 

Common Stock, Par Value $0.01 per share

(Title of Class of Securities)

 

452926108

(CUSIP Number of Class of Securities)

 

Erik L. Johnson, President and Chief Executive Officer

Transcontinental Realty Investors, Inc.

1603 LBJ Freeway, Suite 800

Dallas, Texas 75234

Telephone: (469) 522-4200 

(Name, Address and Telephone Number of Persons Authorized

to Receive Notices and Communications on Behalf of Filing Persons)

 

With a copy to:

 

Steven C. Metzger, Esq.

Metzger Law PLLC

4709 W. Lovers Lane, Suite 200

Dallas, Texas 75209

Telephone: 214-740-5030

 

☐

Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer.

 

Check the appropriate boxes below to designate any transactions to which the statement relates:

 

☒

third-party tender offer subject to Rule 14d-1.

☐

issuer tender offer subject to Rule13e-4.

☐

going-private transaction subject to Rule 13e-3.

☒

amendment to Schedule 13D under Rule 13d-2.

 

Check the following box if the filing is a final amendment reporting the results of the tender offer.

 

If applicable, check the appropriate box(es) below to designate the appropriate rule provision(s) relied upon:

 

☐

Rule 13e-4(i) (Cross Boarder Issuer Tender Offer)

☐

Rule 14d-1(d) (Cross Border Third-Party Tender Offer)

 

 

 

This Amendment No. 2 to Schedule TO (this “Amendment”) amends portions of an original Statement on Schedule TO filed December 16, 2024, by Transcontinental Realty Investors, Inc., a Nevada corporation (the “Offeror” or “TCI”) with respect to TCI’s offer to purchase up to 100,000 shares of the outstanding shares of common stock, par value $0.01 per share (each a “Share” and collectively the “Shares”) of Income Opportunity Realty Investors, Inc., a Nevada corporation (“IOR”) at a purchase price of $18 per Share, net to the seller in cash, without interest (the “Offer Price”) and less any taxes required to be withheld, upon the terms and conditions set forth in the Offer to Purchase dated December 16, 2024 (the “Offer to Purchase”) and the related Letter of Transmittal (the “Letter of Transmittal” which together with the Offer to Purchase, as such may be amended or supplemented from time to time, constitute the “Offer”).

This Amendment is being filed on behalf of the Offeror to reflect and disclose that the Offeror has extended the Offer and to correct errors and add additional information and exhibits. Except as otherwise set forth in this Amendment, the information set forth in the Schedule TO, as amended by Amendment No. 1 (the “Schedule TO”), remains unchanged and is incorporated herein by reference to the extent relevant to the items in this Amendment. Capitalized terms used but not defined herein have the meanings ascribed to them in the Schedule TO.

ITEMS 1 THROUGH 9; ITEM 11.

The Offer to Purchase and Items 1 through 9 and Item 11 of the Schedule TO, to the extent such Items 1 through 9 and Item 11 incorporate by reference the information contained in the Offer to Purchase, are hereby amended and supplemented by adding the following paragraphs thereto:

On January 14, 2025, TCI extended the Offer to 5:00 p.m., New York City time, on January 29, 2025, unless further extended. The Offer was previously set to expire at 5:00 p.m., New York City time, on January 15, 2025. The Depositary has advised TCI that as of 5:00 o’clock p.m., New York City time on January 13, 2025, two IOR stockholders of record had tendered Shares and a number of Shares had been validly tendered through CEDE pursuant to the Offer and not withdrawn.

On January 14, 2025, TCI announced an extension of the Expiration Time of the Offer to 5:00 p.m., New York City time, on January 29, 2025, unless further extended.

The full text of the announcement of the extension Press Release is attached as Exhibit (A)(5)(B) to this Amendment and is incorporated herein by reference.

Amendments to the Offer to Purchase and Other Exhibits to the Schedule TO.

The Offer to Purchase and Items 1through 9 and Item 11 of the Schedule TO, to the extent such Items 1 through 9 and Item 11 incorporate by reference the information contained in the Offer to Purchase, are hereby amended and supplemented by adding the following thereto:

(a)       All references regarding the scheduled expiration of the Offer being “5:00 p.m., New York City time, on January 15, 2025” set forth in the Offer to Purchase, the Letter of Transmittal, the Notice of Guaranteed Delivery, Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees, and the Letter to Clients for Use by Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees are hereby amended and replaced with “5:00 p.m., New York City time, on January 29, 2025.”

(b)       Item 2. Subject Company Information is amended at subpart (b) thereof to provide that as of November 8, 2024 (the Record Date for determination of stockholders of IOR entitled to Notice of and to vote at the Annual Meeting of Stockholders on December 11, 2024) and as of the date of this Amendment, there were and are 4,066,178 issued and outstanding Shares of Common Stock, par value $0.01 per Share of IOR.

(c)       Item 8 of the Schedule TO is hereby amended to add the following sentence to existing disclosure:

“There have been no transactions by TCI or its officers or directors in the Shares of IOR in the sixty (60) days prior to December 16, 2024.”

(d)       All references in the Offer to Purchase to any “subsequent offering,” including on page 6 thereof, are hereby deleted as because the Offer is a limited tender offer for up to 100,000 Shares, which is less than all outstanding Shares, there cannot be a “subsequent offering period”.

(e)        All references in the Offer to Purchase purporting to limit any extension of the Offer to “ten days” or “fifteen days” are hereby deleted and the Offer may be extended for any period of time up to twenty-eight (28) calendar days which shall be inserted instead of any reference to “ten days” or “fifteen days”.

(f)       The second sentence of the second paragraph on page 5 of the Offer to Purchase beginning “for any period. . .” shall conclude with “. . . up to twenty-eight (28) calendar days.”

(g)       The placeholder of $XX.00 in the second line of the first paragraph on page 10 of the Offer to Purchase is hereby replaced with “$18”.

(h)       On page 12 of the Offer to Purchase under the question “Can the Offer be extended and under what circumstances?” is the fourth and fifth line from the top of such paragraph, the phrase “of not more than ten business days each. . . ” is hereby deleted.

(i)       The Offer to Purchase may contain a reference indicating that IOR may request TCI to extend the Offer, but no agreement or understanding exists between TCI and IOR with respect to the Offer and if IOR requests TCI to extend the Offer, TCI will give any such request the consideration merited that exists at the time such request is made, if any.

(j)       The last paragraph under “THE OFFER 1. Terms of the Offer” provides that TCI currently intends to purchase only the 100,000 Shares sought by this Offer and if more than 100,000 Shares are tendered prior to the Expiration Time, it is expected that a pro ration of tenders will occur resulting in a return of some number of Shares to holders of the excess Shares; if a pro ration is to occur, TCI will sort through the mechanics of pro ration of Shares as soon as reasonably practicable but in no event more than six Business Days.

(k)       The SEC no longer maintains a public reference room where filings can be inspected and copied by the public. References to the SEC’s Public Reference Room in the second paragraph under the sub-caption “8. Certain information concerning IOR” and the ability to be examined and copies obtained from the SEC in the third paragraph under the sub-caption “18. Miscellaneous” are hereby deleted from the Offer to Purchase in their entirety.

(l)       The description in the Offer to Purchase under “12. Purpose of the Offer; Plans for IOR – Plans for IOR” clearly state that TCI simply seeks by the Offer to increase its investment in the ownership of IOR Shares by up to 100,000 IOR Shares (approximately 2.46% of the outstanding) so that TCI may be in a greater ownership position to enable TCI to review its future options with respect to such investment. TCI has no immediate plans to seek to be in the position that enables TCI to engage in any “short form merger” or so called “parent subsidiary merger” under Nevada law, and TCI could not do so, in any event, unless or until TCI acquired from its affiliate RAI the 269,299 Shares (approximately 6.62% of the IOR stock outstanding). However, those statements and TCI’s intentions notwithstanding, the staff of the SEC insists that the Offer is a Rule 13e-3 transaction and accordingly the second paragraph on page 30 of the Offer to Purchase is hereby amended to add the following sentence:

“The Offer, even though for only up to 100,000 Shares of IOR (approximately 2.46% of the outstanding) is a Rule 13e-3 transaction.”

(m)       The first paragraph under “13. Extension of the Offer; termination, termination, Amendment.” Is hereby amended by adding at the end of such paragraph the following sentence:

“In the event of the termination or withdrawal of the Offer, TCI will promptly either pay the Offer Price or return the securities deposited by or on behalf of security holders.

(n)       The Offer to Purchase is hereby further amended by deleting the reference “. . . the Tier II exemption under Rule 14d-1 (d). . .” in the first line of the second paragraph under “13. Extension of the Offer; Termination; Amendment.” And replacing same with “. . . Rule 14d-1(c). . .” so that the first line of such paragraph reads “TCI’s reservation of the right to delay payment for Shares which have been accepted is limited by Rule 14d-1(c) which requires that TCI must pay the consideration offered or return the Shares tendered promptly after termination or withdrawal of the Tender Offer.”

(o)       The Offer to Purchase in the table under “17. Fees and expenses” makes reference to “Filing Fees and Related Fees” as $1,500 which was a rough estimate of the amount of filing fees which might be incurred and required in connection with filing of materials under EDGAR with the SEC for Schedules TO, 14D-9 and/or 13E-3, if required. TCI continues to believe that no filing fees with the SEC are required if the Offer is not declared to be a Rule 13e-3 transaction. Such estimated amount would include the sum of $306.20 as the amount of the filing fee to be paid upon consummation of the Offer [which amount may increase if more than 100,000 Shares are tendered and purchased by TCI] and payment of $18 per Share for a total of 100,000 Shares at the conclusion of the Offer and the final amendment on Schedule TO disclosing same. Such filing fee of $306.20 was not paid at the filing of an initial Schedule TO as TCI did not believe the Offer to be a Rule 13e-3 transaction. All filing fees will be paid on the final amendment to Schedule TO based on the number of Shares actually purchased by TCI.

  

ITEM 12 EXHIBITS.

 

Item 12 of the Schedule TO is hereby amended and supplemented to add the following exhibits:

 

Exhibit Designation	Document Description
(A)(5)(B)	Press Release of TCI dated January 14, 2025.
107	Filing Fee Table

 

 

SIGNATURES

 

After reasonable inquiry and to the best of the respective knowledge or belief, the undersigned certify that the information set forth in this Amendment is true, complete and correct.

 

Dated: January 15, 2025	TRANSCONTINENTAL REALTY INVESTORS, INC.
	By:	/s/ Erik L. Johnson
		Erik L. Johnson, President and Chief Executive Officer

 

 

Transcontinental Realty Investors, Inc. SC TO-T/A

 

PRESS RELEASE

Exhibit (A)(5)(B)

 

TRANSCONTINENTAL REALTY INVESTORS, INC. EXTENDS LIMITED TENDER OFFER FOR INCOME OPPORTUNITY REALTY INVESTORS, INC. SHARES TO JANUARY 29, 2025

 

 

 

Dallas, Texas (January 14, 2025) – Transcontinental Realty Investors, Inc. (NYSE: TCI) announced today that it had extended the expiration date and time of the previously announced limited tender offer to purchase shares of common stock, par value $0.01 per share (the “Shares”) of Income Opportunity Realty Investors, Inc. (NYSE American: IOR) for $18 per shares, net to the seller in cash without interest and less any required withholding taxes (the “Offer”) to 5:00 o’clock p.m. New York City time on Wednesday, January 29, 2025, unless further extended (the “Expiration Time”). The tender offer was previously scheduled to expire at 5:00 o’clock p.m., New York City time on January 15, 2025. All of the terms and conditions of the tender offer remain unchanged.

 

Equiniti Trust Company, LLC, as the Depositary for the tender offer has advised TCI that, as of 5:00 o’clock p.m., New York City time on January 13, 2025, two IOR stockholders of record had tendered Shares and a number of Shares had been validly tendered through CEDE and not withdrawn from the tender offer. Holders of Shares tendered to the Depositary may withdraw Shares prior to the Expiration Time in accordance with the Withdrawal Rights described in Section 4 of the Offer to Purchase.

 

The Offer to Purchase and related tender offer materials have been filed with the SEC. IOR stockholders who need additional copies of the Offer to Purchase and related tender offer materials or who have questions regarding the Offer should contact D.F. King & Co., Inc., the information agent for the tender offer at toll free (800) 431-9643 or by email to ior@dfking.com. There is no dealer manager for the tender offer and no soliciting dealer fees will be paid in the tender offer.

 

About Transcontinental Realty Investors, Inc.

 

Transcontinental Realty Investors, Inc., a Nevada corporation is a Dallas based real estate investment company holding a diverse portfolio of equity real estate located across the U.S., including office buildings, multifamily and developed and undeveloped land. The company invests in real estate through direct ownership, leases and partnerships and invests in mortgage loans on real estate. The company also holds mortgage receivables. For more information, visit the website at www.transconrealty-invest.com.

 

About Income Opportunity Realty Investors, Inc.

 

Income Opportunity Realty Investors, Inc., a Nevada corporation is a Dallas based real estate investment company, currently holds a portfolio of notes receivable. The company also invests in real estate through direct equity ownership and partnerships. For more information, visit the website at www.incomeopp-realty.com.

 

Important Information about the Tender Offer

This press release is for informational purposes only and does not constitute an offer to purchase Shares of IOR common stock, a solicitation to sell such Shares or a solicitation/recommendation statement under the rules and regulations of the SEC. The tender offer is being made pursuant to a Tender Offer Statement on Schedule TO, as amended (including the Offer to Purchase, Letter of Transmittal and related Tender Offer documents) which have been filed by the Offeror with the SEC. These documents contain important information and stockholders of IOR are strongly advised to carefully read these documents in their entirety before making any decision regarding tendering their Shares. The Offer to Purchase and certain other tender offer documents, are available to all stockholders of IOR at no expense to them. These documents may be obtained at no charge at the SECs website at www.sec.gov. The Tender Offer Statement and related materials may also be obtained at no charge by directing a request by mail or email to the Information Agent for the Tender Offer, D.F. KING & Co., Inc., 48 Wall Street, 22^nd Floor, New York, NY, 10005, or by calling toll free (800) 431-9643 or by email at ior@dfking.com.

 

Cautionary Statements

 

Statements in this press release that are not historical, including statements regarding TCI’s beliefs, expectations, and strategies constitute “forward-looking statements” within the meaning of the federal securities laws. These statements are subject to risk and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements. Important factors that could cause the differences are discussed in TCI’s reports on Form 10-Q, 10-K and 8-K that TCI periodically files with the SEC. These factors include TCI’s revenue and expenses, TCI’s capital needs, TCI’s dependence on significant matters, risks that TCI may incur significant costs related to certain insurance retention levels. TCI does not undertake to update any forward-looking statements in this press release. Copies of TCI’s SEC filings, including its annual report on Form 10-K and quarterly reports on Form 10-Q may be obtained by contacting www.sec.gov or at the SEC Filing Section of TCI’s website at www.transconrealty-invest.com.

 

Contacts

 

Transcontinental Realty Investors, Inc.

Investor Relations

Erik Johnson (469) 522-4200

investorrelations@transconrealty-invest.com

 

Transcontinental Realty Investors, Inc. SC TO-T/A

Exhibit 107

 

Calculation of Filing Fee Tables

Table 1 – Transaction Valuation

	Transaction Valuation	Fee rate	Amount of Filing fees
Fees to Be Paid	N/A	*
Fees Previously Paid
Total Transaction Valuation
Total Fees Due for Filing
Total Fees Previously Paid
Total Fee Offsets
Net Fee Due

 

Table 2 – Fee Offset Claims and Sources

	Registrant or filer name	Form or filing type	File number	Initial filing date	Filing date	Fee offset claimed	Fee paid with fee offset source
Fee Offset Claims
Fee Offset Sources

 

Explain how the transaction valuation was determined. 

 

 

___________________

* the Fee Rate is $153.10 per million dollars of Transaction Valuation from and after October 1, 2024 pursuant to SEC Fee Rate Advisory issued August 20, 2014.

---