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September 1, 2007
Accredited's "Strong" Move
Accredited didn't even wait until Tuesday to respond and reject Lone Star's settlement offer. It is a nice, strong move, but expect there to be behind the scenes negotiations through to September and for VC Lamb to push the parties towards a settlement. Here's the response for your files:
Accredited to Continue Lawsuit Against Lone Star
Rejects Proposal To Re-Price At $8.50 Per Share
SAN DIEGO--(BUSINESS WIRE)--Aug. 31, 2007--Accredited Home Lenders Holding Co. (NASDAQ:LEND) ("Accredited" or "Company") announced today that it will continue to pursue its lawsuit against Lone Star Fund V (U.S.), L.P. and two of its affiliates ("Lone Star") 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.
Accredited noted that, on August 30, 2007, Lone Star disclosed that it has proposed to Accredited's Board of Directors to settle the lawsuit and reduce the offer price of $15.10 to $8.50 per share, a reduction of approximately 44%. As Accredited has previously announced and asserts in its lawsuit, Accredited believes that all conditions to closing of the tender offer at $15.10 per share were satisfied when more than 97% of Accredited's outstanding common stock was tendered at the scheduled expiration of the offer on August 14, 2007. The lawsuit seeking to require Lone Star to perform its obligations is scheduled for trial in the Delaware Court of Chancery beginning on September 26, 2007.
After Lone Star's August 10, 2007 announcement that it did not expect to accept Accredited shares tendered on August 14, 2007, Accredited filed the specific performance suit against Lone Star seeking to hold Lone Star to its obligations at $15.10 per share. James A. Konrath, chairman and chief executive officer of Accredited, commented, "Accredited has always believed that its case against Lone Star is very strong. Discovery has been proceeding in the lawsuit, and nothing we have seen to date has altered our perception of the strength of our case."
Accredited's Board of Directors had been meeting with the Company's litigation counsel and financial advisors on a regular basis to discuss the progress of the lawsuit and evaluate its merits. 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.
September 1, 2007 in Material Adverse Change Clauses | Permalink
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