Lone Star again extends tender offer for Accredited Home

By Lisa Kerner

Charlotte, N.C., Aug. 15 - Lone Star Fund V (U.S.), LP subsidiary LSF5 Accredited Investments, LLC extended its tender offer for all of Accredited Home Lenders Holding Co.'s outstanding shares of common stock to midnight ET on Aug. 28.

The offer was to close at midnight ET on Aug. 14. Lone Star had received tenders for 10,904,316 of the company's shares, including some 43% of its common stock, as of Aug. 13.

Lone Star and Accredited Home entered into a merger agreement on June 4, a news release stated. Under the agreement, Lone Star is required, under certain conditions, to extend the tender offer for up to 10 business days at Accredited Home's request.

As previously reported, Accredited Home filed a lawsuit against Lone Star and two of its affiliates obligating Lone Star to close its tender offer for the company and complete the merger as planned.

Lone Star, in a Securities and Exchange Commission filing, alleged that Accredited Home would not satisfy the conditions to the closing of the tender offer. Lone Star blamed its allegation on the "drastic deterioration in the financial and operational condition" of Accredited Home.

Accredited Home's board of directors continued to urge shareholders to tender their shares. At one time, the offer was slated to end on July 16 but was extended to July 31 and later to Aug. 14.

Lone Star agreed to acquire Accredited Home for $15.10 per share in an all-cash transaction valued at $400 million. The outstanding 9¾% series A perpetual cumulative preferred shares of Accredited Mortgage Loan REIT Trust will remain outstanding. The transaction is expected to close in the third quarter of 2007.

Under the companies' merger agreement, changes generally affecting the non-prime industry do not provide a basis for Lone Star to bail out of the deal, Accredited Home said in a company news release.

Accredited Home Lenders is a San Diego mortgage company, and Accredited Mortgage Loan REIT Trust is a Maryland real estate investment trust formed in May 2004.

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