Buyout Firms Submit Revised Offer for Sallie Mae
From the Associated Press
The group of investors that threatened to pull out of its deal to buy Sallie Mae for $25 billion on Tuesday reduced its cash offer for the nation's largest student lender by 17 percent.
A Sallie Mae spokesman said the Reston company's board will review the revised offer "and respond quickly and appropriately based on the best interests of our shareholders."
The investor group led by private equity firm J.C. Flowers & Co. said last week that landmark student-loan legislation signed into law by President Bush -- as well as the uncertain economic climate -- made the deal unacceptable at the original $60-a-share price negotiated in April.
The group sent the revised proposal to the board of the company, formally called SLM Corp., saying that the new $50-a-share cash offer "appropriately and fairly reflects the new economic and legislative environment that faces the company."
The new offer includes additional potential payment of more than $7 a share if Sallie Mae performs on track with its own projections, or up to $10 a share if the company exceeds them.
The new student loan legislation will cut about $20 billion in federal subsidies to companies like Sallie Mae that make student loans while halving the interest rate on government-backed student loans.
Shares of Sallie Mae climbed $1.31, or 2.6 percent, to $51.21 in afternoon trading.
Please email us to report offensive comments.
The comments to this entry are closed.