The Residential Real Estate Crash Index Message Board

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Strategies & Market Trends : The Residential Real Estate Crash Index

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To: John Vosilla who wrote (54883)	5/25/2006 2:45:21 PM
From: Travis_Bickle	Read Replies (1) of 306849

Saw this on the yahoo board: 11:01 LEND briefing.com Platinum.aspx?PagePrefix=IN&Ticker=LEND Accredited Home Lenders: First take on the deal is somewhat negative given the significant dilution - Stifel (53.25 +1.31) Stifel notes that this morning LEND announced plans to buy subprime mortgage company Aames Investment for $340 mln in cash and stock, a deal that values the co at $5.35/share. Their first take on the deal is somewhat negative given the significant dilution, as well as little disclosure regarding potential accretion in 2007, which will require significant cost savings, in their view. Given LEND's profitable business model and low cost structure, it's not clear to the firm why mgmt felt the need to buy Aames rather than simply pursue organic growth. They believe the deal was motivated by Aames' significant retail operation, which represents nearly 50% of production vs just 13% at LEND. While the deal will allow LEND to significantly expand its retail franchise, they view it as a negative signal for wholesale mkts given pressure on pricing

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