Accredited, Lone Star Amend Merger Deal, Cut Price
Subprime mortgage lender Accredited Home Lenders agreed on Tuesday to be bought at a lower price by Lone Star and to drop a lawsuit against the private equity firm.
Lone Star, which on June 4 had agreed to pay $15.10 per share for Accredited common shares, agreed to acquire the mortgage lender for $11.75 per share under an amended merger agreement.
The acquisition remains structured as an all-cash tender offer.
Lone Star had tried to back out of the merger agreement after market conditions for mortgage lenders deteriorated.
In late August, it submitted a revised $8.50-per-share takeover bid, but Accredited rejected the lowered offer.
The two companies agreed to an immediate stay of a lawsuit filed by Accredited regarding the merger, according to a statement.
Lone Star also agreed to provide financing of $49 million to Accredited, of which about $34 million will be used to pay down outstanding debt against one of the mortgage lender's creditors.