Sallie Maes High-Stakes StandoffContract dispute and re-negotiation ? certainly no wiz?s habitation of fun and probably the last words a corporal CEO commands to hear in the midst of an acquisition deal. Sallie Mae, one of the nation?s largest student loan lenders, agreed in April to sell to J.C. Flowers, J.P Morgan, and Bank of America for the sum of $25 billion. assuage soon following, speculation to the highest degree looming student loan hulk impeding Sallie Mae profitability gave the Flowers-led group pause for concern near the agreed-upon price; citing the College Cost Reduction and Access Act compile into law on Thursday by President Bush, would adversely affect the bottom-line of the virginly acquired company, the Flowers group stated that this was causal agency for renegotiation of the deal. Sallie Mae scourge to go to court to have the deal enforced. Sallie Mae stipulates that even if the rescue did impact profitability, it would be a nominal percentage and does not constitute grounds for renegotiation since the assumed drop in collapse give be 6% or lower and thusly does not constitute a ?material impact? on profitability. protect Street analyst Sameer Gokhale, of Keefe, Bruynette and Woods, thinks the impact result be significantly less than 6%, speculating Salle Mae?s 2008 earnings leave fall a mere 1.
5% (Eavis, 2007), hardly grounds for renegotiation and rumors bristle that there may soon be a jibe bid if the dispute continues. The Blackstone Group was courting Sallie Mae precedent to the Flowers pack making its offer. Though no one responded to calls from bo th side, including Blackstone, Wall Street w! as ablaze with rumor that Sallie Mae had asked the buyers to name their new price. It is expect that if the new price is significantly lower, rival bids will develop and according to Peter Eavis, by publicly questioning deal... If you want to get a full essay, order it on our website:
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