Accredited Home Lenders jumped in early trading this morning after private equity firm Lone Star offered to reduce the price it will pay to acquire the company to $8.50 a share.
Previously, Lone Star had offered $15.10 for the struggling subprime lender, but tried to rescind their offer after Accredited announced that it would be exiting the retail lending business and halting the wholesale side.
Lone Star contended that Accredited could not satisfy conditions related to the buyout, and would have to settle for a reverse break-up fee of $12 million at best.
Accredited countered by suing Lone Star in a Delaware court in an attempt to force the firm to close the deal.
Lone Star said its reduced offer was a 35% premium to Accredited’s closing stock price of $6.31 per share on Thursday, though about half the original bid.
The firm is still working on a revised agreement to allow third-party companies to make offers for Accredited which could allow the company to back out completely.
Lone Star extended its latest offer until September 12th, its fourth extension since the original deal was announced.
The mortgage lender did not immediately comment on the new proposed bid from Lone Star.
Shares of Accredited Home were trading up $2.50 or roughly 40% to $8.81, above the new asking price from Lone Star.
Update: Accredited Home Lenders rejected Lone Star Funds’ revised bid of $8.50 per share, saying it was not in the best interest of shareholders.