Accredited Home Lenders (NDAQ:LEND) shares rose $1.78, or 18.2%, to $11.56 today after it finally reached an agreement to sell out to Loan Star at $11.75 per share, according to a statement released by both companies.

"This new agreement fairly settles our dispute and will expedite the completion of the merger with Lone Star," said Accredited chairman and CEO James A. Konrath in the statement. "We will now turn to the business of rebuilding Accredited for a brighter future with Lone Star."

The revised bid comes substantially lower than the previous offer, but just hours after the company released its 10-Q saying it lost $260 million in the first quarter and may not survive. The price jump also implies that the bid caught shareholders off-guard and came in higher than expected.

The agreement stipulates that Loan Star lend Accredited $49 million so it can pay down outstanding debt to one creditor and leave the company with $15 million in liquidity. Meanwhile, Loan Star would also deposit $295 million into an escrow that would be paid out to Accredited shareholders once the deal closes.

In the end, this is good news for Accredited shareholders who have been bracing for the worst case scenario. Clearly, the company was on the brink of bankruptcy before it was saved by Lone Star and at a price that isn't so bad. Combined, these factors make LEND a stock worth watching!

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