Accredited Home Lenders to Be Sold to Private Equity Company for $400 Million

http://biz.yahoo.com/ap/070604/accredited_home_lenders_lone_star_fund.html?.v=1

Subprime lender Accredited Home Lenders Holding Co. on Monday said it agreed to be acquired by private-equity company Lone Star Fund V LP for about $400 million in cash.

Lone Star will pay $15.10 per share for the company, a 10 percent premium over the stock's closing price of $13.76 on Friday.

In a statement, company Chief Executive James A. Konrath said Lone Star has helped other companies "address financial and operational challenges."

The offer is expected to close in the third quarter.

In May, Accredited delayed filing its audited first-quarter report because it was transitioning to a new auditor and forecast a "significant loss" for the quarter.

The subprime mortgage industry, which caters to home buyers with bad credit, fell into turmoil earlier this year as payment defaults spiked and investors lost their appetite for risky home loans.

Shares rose 47 cents, or 3.4 percent, to $14.23 during premarket electronic trading, after closing at $13.76 on Friday. The stock traded as high as $55.91 at one point during the past year, before the subprime collapse.

Who bought Accredited? You did!:

"Lone Star Funds (Lone Star) are closed-end, private-equity limited partnerships that include corporate and public pension funds, university endowments, foundations, bank holding companies, family trusts and insurance companies."


Well, at least they've got some experience in dealing with foreclosures and REO:

"In Asia, Greater North America and Europe, Lone Star has been a successful investor in non-performing loans and real estate."

http://www.lonestarfunds.com/En/introduction.htm

The worst thing about this deal for me personally is that I'm going to have to realize a huge capital gain. I was hoping for a much longer, slower death for Accredited.

Edited 1 time(s). Last edit at 06/04/2007 10:34AM by RodgerRafter.

That is a tough way to go.

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