Lone Star Files Counterclaim Against Accredited Home

Aug.21.07 | About: Accredited Home (LEND)

Private equity firm Lone Star Funds "categorically denies" the allegation of breach of contract raised in a suit by prospective buyout candidate Accredited Home Lenders Holding Co. Lone Star, which wants to cancel the planned $400 LEND 21 08 2007 Chartmillion ($15.10 per share) merger, has filed a counterclaim in Delaware Chancery Court. In its complaint, the buyout firm asks the court to declare that Accredited has failed to meet several conditions necessary for the closing of the tender offer because it has suffered a "material adverse effect" and asserts that Accredited has "materially breached numerous other obligations." According to Lone Star, Accredited is entitled to the agreed-upon $12 million reverse break-up fee and nothing more. Accredited's shares closed down 4.6% at $6.44 on Monday and then sank another 5.75% to $6.07 after hours.

Sources: Press release, MarketWatch, Reuters
Commentary: Accredited Home Deal Still On; Shares RiseAccredited Home Sues Lone StarLone Star, Accredited Deal is Still On - For Now
Stocks/ETFs to watch: LEND. Competitors: FNM, FRE

Seeking Alpha's news briefs are combined into a pre-market summary called Wall Street Breakfast. Get Wall Street Breakfast by email -- it's free and takes only seconds to sign up.