$NHPAP/$NHPAB Well Funded Tender Offer With Odd-Lot Provision

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PricedtoZero

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$NHPAP/$NHPAB Well Funded Tender Offer With Odd-Lot Provision
  • National Healthcare Properties offered to repurchase $100M of preferred shares ($NHPAP/$NHPBP) at $22.50 each, with priority for odd-lot holders
  • Tender offer is well funded, with the recent IPO of the company's common stock generating $531.3M in proceeds
  • Current prices offer a spread of 0.67%-1.56% and annualized returns of 6.10%-14.74%, offer expires 6/16/26

On 5/18/2026 National Healthcare Properties made a tender offer expiring 6/16/26 at 5 PM for its series A ($NHPAP) and series B ($NHPAB/$NHPBP) preferred shares ($25 liquidation preference each) at $22.50, purchasing a maximum of $100M worth of preferred stock. At this offer price, there is currently $181.7M of this preferred stock outstanding.

If the offer is oversubscribed, holders of odd-lots (under 100 shares) who tender all of their shares will receive priority over the larger pool of shareholders. This limit applies to each issue separately, meaning that one can hold up to 99 shares of each issue and still receive priority. After all of the odd-lot shares have been purchased, series A shares will be given priority over series B. If the value of the shares tendered exceeds the $100M allocated, non-priority shareholders will have their shares purchased on a prorated basis.

This share repurchase is well funded, with the company recently issuing its common stock ($NHP) to the public, generating $531.3M in proceeds.

The price of series A and B preferred shares rose quickly following this announcement, tightening the spreads to 0.67% and 1.58% respectively. These spreads offer an annualized return of 6.10%-14.74% assuming the offer takes two weeks to settle after its official expiration date of 6/16/26. While at current prices I do not find the spread to be particularly attractive, since this post is being written only two days after the announcement, it is possible that the spread may widen before the offer's expiration. Below I have calculated the theoretical spreads, maximum profits, and annualized returns of this offer at different prices.

Note: While the offer officially expires on 6/16/26 at 5 PM NYC time, different brokers can have their own earlier deadlines for users to tender their shares.

Disclaimer: I am not a licensed financial advisor. Nothing on this Blog, social media, or any other platform where I post content should be considered financial advice. Any views expressed here are my own, shared for informational purposes only. Readers should conduct their own research or consult with a licensed professional before making investment decisions.

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