SoftBank-backed doValue will acquire Italian bad loan manager Gardant in a deal which includes 230 million euros ($250.59 million) in cash and the rest in stock, the company said on Thursday.

DoValue, Italy's biggest bad loan company, will issue new shares resulting in a 20% stake in the combined group for Gardant shareholders, the company said in a statement.

The deal also includes a financing package of 500 million euros and a rights issue of 150 million euros to existing and new shareholders, it said.

The acquisition is expected to be cash accretive to doValue's earnings per share in the medium term, and Elliott Management will have two representatives on doValue's board of directors, subject to shareholder approval, the company said.

U.S. fund Elliott Management is the owner of Gardant.

In March, Softbank Group and Elliott Management had entered into a non-binding agreement to combine Gardant and doValue in a cash-and-shares deal.

With the merger, doValue would secure a stream of revenue thanks to Gardant's recent deal to buy BPER Banca's non-performing loan business and provide collection services to the Italian bank for 10 years.

($1 = 0.9179 euros)

(Reporting by Gnaneshwar Rajan in Bengaluru; Editing by Nivedita Bhattacharjee and Janane Venkatraman )