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$25B Sallie Mae Buyout on the Rocks

Credit market implosion leaves buyer looking for the door

By Kevin Spak, Newser Staff

Posted Sep 27, 2007 9:52 AM CDT

(Newser) – Sallie Mae doesn’t look like such a bargain at $25 billion anymore, and J.C. Flowers & Co. is trying to renegotiate—or escape—its deal to acquire the student lender, citing the credit market implosion and legislation to reform student loan practices. It’s the kind of deal once considered unbreakable, the Wall Street Journal says, but private equity is in disarray.

Flowers is offering to close the deal at a lower price, in part to preserve its deal-making reputation. Sallie Mae’s share price will tumble if the deal evaporates, it argues, and no new buyer is likely in the dissipating private equity market. Sallie Mae, meanwhile, worried about shareholder wrath, has promised a legal fight—which could net it up to $900 million.

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$25B Sallie Mae Buyout on the Rocks

Credit market implosion leaves buyer looking for the door

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...that's more than Americans owe on their credit cards

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$25B Sallie Mae Buyout on the Rocks

Credit market implosion leaves buyer looking for the door

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OTHER STORIES ON OUR RADAR

private equity • Sallie Mae • student loans • credit market • private equity firms • JC Flowers and Co • student loan reform

MOST POPULAR STORIES

[ By Views ]

[ By Comments ]

More Newser Stories

Private Equity Can Ruin Firms —and Still Profit

Tax loopholes, money tricks benefit bosses like Mitt Romney: James Surowiecki

Romney's Bain Had Loads of Profit, Bankruptcies

Wall Street Journal says Romney's firm didn't always turn things around

Ron Paul: Let's Kill Federal Student Loans

Says government's driving up college tuition, needs to get out of lending business

Student Loan Debt to Hit $1T This Year

...that's more than Americans owe on their credit cards

Carlyle Group Files for IPO

Huge private equity company to open its books

About Us

Site

Newser By Users

Community

Site Maps

Tools

More News

What is Newser?