Accredited Home Lending agrees to $400M purchase

Accredited Home Lenders Holding Co. announced today it has agreed to be purchased for about $400 million by a private equity firm.

Dallas-based Lone Star Fund V will buy Accredited, of Rancho Bernardo, in the all-cash transaction for $15.10 per share.

Accredited, which makes subprime loans to home buyers, had been considered by analysts to be one of the sounder subprime lenders. However, the Rancho Bernardo-based company has been badly hurt by turmoil in the subprime lending industry caused by an increasing number of bad loans.

Accredited has delayed filing its latest quarterly report due to switching to a new auditor. It predicted incurring a significant loss when it does file. Accredited stock has tumbled over the last 12 months from $55.91 to $3.77 earlier this year. The stock closed at $13.76 on Friday.

Erin Swanson, an analyst at the Chicago-based research company Morningstar, said the purchase is good news for Accredited investors.

"It is a prudent deal, given the near-term liquidity risk that Accredited battles on a daily basis these days," Swanson said. "It’s a sure thing, right now, where there is still significant risk in the firm. "However, if Accredited had been able to weather these short-term constraints, which is a big if . . . there could have been further upside possible."

Shareholders will get a 10 percent premium over Friday’s close, Swanson noted.