After a long and litigious series of negotiations, US private equity firm Lone Star has acquired all the outstanding shares of Accredited Home Lenders in a deal valued at $311 million (€211 million).
The $11.75 share price represents a significant cut from the original $15.10 per share agreement, but is higher than Lone Star’s previous offer of $8.50 per share.
Lone Star agreed to buy Accredited for $15.10 per share in June. But on 10 August the private equity firm said the company would fail to satisfy conditions of the agreement, citing “drastic deterioration in the financial and operational condition of the company”.
Accredited then sued to force Lone Star to complete the buyout, claiming that trouble in the US subprime market had not “disproportionately affected” the company and did not enable Lone Star to walk away from the deal. Lone Star responded in a letter that it would be willing to modify the offer so that Accredited would only need to meet minimal conditions to close the deal, in exchange for a reduction in its offer price to $8.50 per share.
The lender said in August it would lay off 1,600 of its 2,600 employees, and that it has has stopped originating new loans. Accredited also said it would close “substantially all” of its retail lending business, shutting down 60 branch locations and 5 retail support locations.