Updating a brouhaha I've been covering quite a bit recently, news broke this morning that Lone Star Funds had made a new takeover bid for troubled subprime lender Accredited Home Lenders Holding Co. -- a bid that HW has learned was just rejected by Accredited's board. First, details on the new bid from Boomberg:
Lone Star offered $8.50 a share, 35 percent more than yesterday's closing price, to defuse a legal scuffle that followed its attempt to back out of an earlier acquisition agreement with San Diego-based Accredited. Lone Star initially bid $15.10 a share, or $400 million, on June 4 to acquire Accredited. About a month later, the Dallas- based investment group tried to scrap the deal, citing ``the drastic deterioration'' of Accredited's financial condition, according to a legal complaint. Yesterday's bid totals about $214 million.
It didn't take long for Accredited to reject the new bid - a press release just appeared on the company's Web site:
Accredited Home Lenders Holding Co. announced today that it will continue to pursue its lawsuit against Lone Star Fund V, L.P. and two of its affiliates seeking specific performance of Lone Star's obligations to close Lone Star's tender offer for the outstanding common stock of Accredited at $15.10 per share and to complete the merger with Accredited ... ... The Board of Directors believes Lone Star's proposal to reduce the tender offer price from $15.10 to $8.50 per share is not in the best interest of the shareholders and rejects it.