Accredited/Lone Star Wrangling Ends in Deal

The wrangling between Accredited Home Lenders Holding Co., San Diego, and Lone Star Fund V (U.S.) LP, Dallas, has ended with an agreement to a revised deal for the nonprime mortgage lender.Lone Star will now pay $11.75 cash per share for Accredited, instead of the $15.10 called for in the original transaction agreement and the $8.50 Lone Star had offered (and Accredited rejected) several weeks ago. That offer came after Accredited had sued Lone Star in an attempt to force it to stick to the original terms of the transaction. The revised deal settles that lawsuit. Lone Star has put $295 million into escrow to fund payment in the deal. In addition, it has agreed to provide $49 million in financing to Accredited; approximately $34 million of it will be used to extinguish debt owed by Accredited, and the rest will provide additional liquidity for the mortgage lender. At 11 a.m. on Sept. 19, Accredited's shares were trading at $11.55 per share, up $1.77 from the previous close.