Is Sallie Deal In Jeopardy?
From the Associated Press:
NEW YORK -- A planned $25 billion buyout of the nation's largest student loan lender, Sallie Mae, could fail because of legislation pending in Congress, the potential buyers have said.
SLM Corp., more commonly know as Sallie Mae, said in a statement Wednesday that it disagreed with the investment group's assertion and it would proceed with the deal as swiftly as possible to protect its investors.
The group, headed by J.C. Flowers and includes Bank of America Corp. and JPMorgan Chase & Co., informed Sallie Mae that legislative proposals pending before Congress "could result in a failure of the conditions to the closing of the merger to be satisfied."
The legislation before the House Wednesday would cut in half the interest rate on government-backed student loans -- a move that would be paid for by a roughly $19 billion reduction in federal subsidies to student lenders like Sallie Mae. The bill also would cap annual loan repayments at a percentage of a student's income, protecting graduates with low salaries from having to pay back more than they can afford.
Sallie Mae shares fell more than 14 percent before trading was halted.
Under the terms of the buyout, which was announced in April, Sallie Mae would sell itself to the group for $60 per share.
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Posted by: Brithney | August 1, 2007 6:27 PM
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