Wednesday, December 12, 2007

Sallie Mae’s Buyers Walk Away from the Table

So long, Sallie.
The SLM Corporation, the big student lender known as Sallie Mae, said Wednesday that its offer to craft an “alternative transaction” with a group led by J.C. Flowers & Company had been rebuffed — an announcement that seemed to erase any hope that its embattled $25 billion buyout deal could be renegotiated. In a press release, SLM said the would-be buyer “does not wish to pursue” an opportunity to submit a new bid and indicated that it will “pursue all available recourse, including the company’s existing lawsuit against the buyer’s group.”
Shares of SLM fell nearly 10 percent after the statement was released. At $27.73, they were at their lowest level in at least five years, after adjusting for stock splits.
Sallie Mae and the bidding consortium, which also includes J.P. Morgan Chase and the Bank of America, have been feuding for months about whether the buyers can walk away from the deal without paying a $900 million termination fee. At the heart of the dispute is recently passed legislation that would hurt Sallie Mae’s business.
There is already a suit pending in Delaware’s Court of Chancery, with a tentative trial date in July.
Go to Press Release from SLM via PRNewswire »

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