Accredited Home Lenders Holding Co. said today it has sued private investor Lone Star Funds, seeking to force it to complete the $400 million takeover of the subprime lender, reports Reuters.
Here’s more from Reuters:
Lone Star had agreed in June to pay $15.10 per share for San Diego-based Accredited. On Friday, however, Lone Star said it would not go through with the buyout, citing a “drastic deterioration in the financial and operational condition of the company.”
Accredited said on Monday that the merger agreement “expressly provides that Lone Star may not refuse to honor its obligations based on any deterioration in the business.” If shareholders tender more than half of Accredited shares by Tuesday, all conditions of the merger will be met, Accredited said.
Reuters reported that last week Accredited projected a second-quarter net loss of $40 million to $60 million.
Looks like nobody wants a dog with fleas.
What’s Lonestar thinking? Why pay $400 million for something that’s insolvent, they ran out of money in 1998, went public to raise in money in 2006 and recently took a sub prime loan for $200 million @ 13.75%, threatened to file BK, we are only 1/4 into a horrible mortgage/cash crisis that will deepen into a huge recession/depression, we’ll be lucky to be in the top 20 in two years as far as world economy goes, why would anybody want to buy Accredited or any other subprime Alt A lender? Wondering why they’re desperate to close this deal? Why pay for something that has no apparent value, patience is a virtue.
This deal, like the OOMC deal with Cerberus, will NEVER close, guaranteed.. Not even LoanStar is foolish to pay $15 / share for a stock trading under $6. Chuck has it right, put a fork in ‘em.