Sallie Chairman Exercises Stock Options
Staff writer David Hilzenrath reports that Albert L. Lord last week exercised 1.7 million stock options that were due to expire yesterday, at exercise prices of $18.33 to $26.62 per share.
Lord used about 1.1 million of the options to pay taxes or exercise costs related to the trades, according to a regulatory filing. He kept the remaining shares.
The value of Lord's stake in the Reston student loan company is riding on a pending buyout by private investors at $60 per share. At that price, his options and stock awards would be worth $224.9 million on completion of the deal, SLM Corp., as the company is formally known, reported last month.
However, the stock market seems to doubt that the deal will go through as planned: Sallie Mae's shares fell $1.30 yesterday to close at $46.90, closer to $40.75, the price before news of the deal was reported. The buyers have stated that proposed changes in federal student loan programs could be grounds for calling off the deal. Sallie Mae has rejected that view.
The recent drying up of easy money for debt-fueled buyouts could make pending deals such as Sallie Mae's costlier and more complicated to complete, some analysts say. Higher borrowing costs could give the investment banks in the Sallie Mae buyout group an incentive to try to renegotiate terms or back out, analysts say.
Sallie Mae issued a statement Aug. 3 saying that several members of its board would be exercising options that were scheduled to expire yesterday. The board members will not sell any shares acquired from exercising the options, the company said.
Also exercising expiring options last week or yesterday were directors Steven L. Shapiro and A. Alexander Porter Jr., according to regulatory filings.
Please email us to report offensive comments.
Posted by: SEIU.Deal Team | August 14, 2007 10:12 AM
The comments to this entry are closed.