WASHINGTON
Sallie Mae insisted Tuesday that the investors reducing by 17 percent their cash offer for the nation’s largest student lender honor their original $25 billion deal.
The investor group, led by private equity firm J.C. Flowers & Co. and including Bank of America and JPMorgan Chase, said the student-loan legislation signed into law by President Bush last week, and weaker economic conditions, made the $60-a-share price agreed upon in April unacceptable.
The group sent its revised offer to the board of the company, formally called SLM Corp., saying that $50 a share now “appropriately and fairly reflects the new economic and legislative environment that faces the company.”
Under the new offer, worth about $21 billion in cash and good until next Tuesday, Sallie Mae has the potential to receive an additional payment of more than $7 a share if the company performs on track with its own projections. It could receive an extra $10 a share if the company exceeds those expectations.
Sallie Mae came back with a terse statement, saying it expects Bank of America Corp. and JPMorgan Chase & Co. “to honor that contract, not breach the contract,” which calls for the deal to be closed later this month.
Shares of Reston, Va.-based Sallie Mae fell 15 cents, or 0.3 percent, to $49.75 in afternoon trading.
