The acquisition remains structured as an all-cash tender offer for all outstanding shares of Accredited common stock to be followed by a merger in which each remaining untendered share of Accredited will be converted into the same $11.75 cash per share price paid in the tender offer. The outstanding 9.75% Series A Perpetual Cumulative Preferred Shares, par value $1.00 per share, of Accredited Mortgage Loan REIT Trust (NYSE: AHH.PrA) will remain outstanding ... The amended merger agreement eliminates most of the original merger agreement's conditions to closing the amended tender offer. The primary remaining conditions to closing are the valid tender without withdrawal of more than 50% of Accredited's outstanding shares (the "Minimum Condition") and the absence of any injunction or similar order preventing the closing. Lone Star's obligation to close the amended tender offer is not subject to any conditions related to the accuracy of representations or warranties made by Accredited, to the absence of a material adverse change, or to the compliance by Accredited with negative covenants, other than limited negative covenants specifically identified in the amended merger agreement.Accredited also said Lone Star will provide $49 million in what appears to be "rescue" funding, with $34 million being used to extinguish outstanding debt and the rest being used to fund operations. Accredited said in the press release that it expects to drop its lawsuit against Lone Star once the merger has been completed, while both companies have agreed to a stay in the interim.
Accredited, Lone Star Agree to Amended Merger
Accredited Home Lenders Holding Co., after filing its quarterly report for the first quarter earlier today and raising questions of its survival, said this evening after market close that it has agreed to an amended merger agreement that will see the subprime lender acquired by Lone Star for $11.75 a share, or $296 million. (Hat tip, Patrick). Lone Star had originally offered $15.10 per share in June ($400 million), before attempting to pull out of the original deal, citing non-performance by Accredited - a move that at the time I'd written was likely smokescreen to force a lower purchase price. Lone Star also had offered $8.50 per share in August, a price that had been rejected by Accredited's board. From the press release, highlights of the revised terms: