Accredited Home Deal Still On; Shares Rise

| About: Accredited Home (LEND)
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Shares of Accredited Home Lenders rose 11% to close at $6.10 Wednesday on news that Lone Star Funds has extended its tender offer for the company, though the extension was required by the terms of the buyout agreement. Lone Star agreed in June to buy Accredited for $400 million, or $15.10 per share. LEND 16 08 2007 ChartThe mortgage market has deteriorated since then, and Lone Star has attempted to back away from the deal. Accredited threatened Lone Star with a lawsuit, arguing that a change in industry conditions does not absolve the buyout firm from its obligations. Lone Star, in compliance with the terms of the agreement, extended its tender offer until midnight of August 28. Lone Star said it had received approximately 11 million shares, or 43% of Accredited's common stock, by close of business Monday. "It appears to us that this deal has a good chance of closing, but we caution that the recent volatility in the mortgage market does create considerable uncertainty over the eventual outcome," wrote Morningstar analyst Erin Swanson.

Sources: Dow Jones, Reuters
Commentary: Lone Star, Accredited Deal is Still On - For NowAccredited Home Sues Lone StarAccredited Home Lenders Gets Regulatory Approval for Sale to Lone Star
Stocks/ETFs to watch: LEND. Competitors: FNM, FRE

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