Accredited Home Lenders announced Friday it has received regulatory approval from states representing over 95% of its loan production, thereby satisfying one of the primary conditions to closing its acquisition by an affiliate of the Lone Star Fund private equity group. Accredited shares plunged last week after the company said it could be forced out of business if it did not succeed in amending its lending covenants, while at the same time saying it didn't expect the need to obtain regulatory approval will prevent the transaction from closing, and that it expects the tender offer to close in the third quarter (see full summary). Accredited agreed in June bought out by private-equity firm Lone Star for $400 million ($15.10/share). The merger is still pending, and shares ($6.13) currently trade well below the acquisition price, as traders worry whether the deal will close. Friday's announcement should substantially increase that likelihood.
Sources: Press release
Commentary: Mainstream Media Gets It Wrong On Accredited Home Lenders Buy Out • Accredited Home Lenders is on Life Support
Stocks/ETFs to watch: LEND
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