![]()
- Obama to Outline Strategy to Boost US Exports to Asia
- Friday May See 'Risk Trade' Stalling; Dollar in Focus
- Job Market Politics to Keep Interest Rates Low
- AIG, Symbol of Crisis, Watches Its Stock Zoom Back
- Disney Profit, Sales Top Street Forecasts; Shares Jump
- Bill Gates Praises Apple's Jobs for 'Saving the Company'
- Cities With the Most Home Price Reductions
- Is Euphoric Market Ignoring Warning Signs?
- Video Game Sales Plunge, but Have They Hit Bottom?
- EXCERPTS and IMAGES: Warren Buffett & Bill Gates - Keeping America Great
- Microsoft's Bill Gates Praises Apple's Steve Jobs For 'Saving the Company'
- Gold Is a Bad Inflation Hedge—Like Oil: Stock Picker
- Intel's Andy Bryant Offers An Explanation
- US 'Actively Working' on Weaker Dollar: Fund Manager
- Options Boil on Biotech Buyout Rumors
- Warren Buffett's $100,000 Offer and $500,000 Advice for Columbia Business School Students
- Activision Blizzard's "Modern Warfare 2" Sales Break Records
- 5-Star Manager's 5 Stocks for Changing Markets
MOST SHARED
- Pharma & Social Media
- CNBC TRANSCRIPT: Warren Buffett & Bill Gates - Keeping America Great
- Cities With the Most Home Price Reductions
- Warren Buffett and Bill Gates Share Their 'Optimism' With Eager Columbia Business Students
- Microsoft's Bill Gates Praises Apple's Steve Jobs For 'Saving the Company'
- Disney Profit, Sales Top Street Forecasts; Shares Jump
- Warren Buffett's $100,000 Offer and $500,000 Advice for Columbia Business School Students
- Is Euphoric Market Ignoring Warning Signs?
- China Fourth Quarter Growth Could Hit 10%: Official
- Obama to Outline Strategy to Boost US Exports to Asia
SLM, the nation's largest student-loan provider also known as Sallie Mae, Monday confirmed it agreed to sell the company to a group of investors for about $25 billion.
The buyer is an investor group led by private-equity firm J.C. Flowers & Co, who will pay $60 per share for the company.
Shares of Sallie Mae [SLM
Loading...
()
] were up 15% Friday on rumors of the deal. The stock closed at $46.76 on the New York Stock Exchange, where shares have traded in a 52-week range of $40.30 to $55.21.
J.C. Flowers and private-equity firm Friedman Fleischer & Lowe will invest $4.4 billion and own 50.2% of the company, and Bank of America [BAC
Loading...
()
] and JPMorgan Chase [JPM
Loading...
()
] each will invest $2.2 billion and each will own 24.9%.
The deal follows a settlement between Sallie Mae and New York Attorney General Andrew Cuomo for $2 million in which Sallie Mae promised to change lending practices such as paying university financial aid officers for appearing on advisory boards.
Attorneys general from states including New York, California and Connecticut are looking into the extent to which student loan companies offer kickbacks to universities and their financial aid employees for steering business to the lenders.
Sallie Mae was created in 1972 as a quasi-governmental company known as a "government sponsored entity." It began cutting its direct government ties in 1997, a process completed in 2004.
After the takeover, Sallie Mae's current management will continue to lead the company, and the company will continue to originate student loans under its internal brands. It will remain headquartered in Reston, Virginia. Bank of America and Chase will continue to operate their independent student lending businesses.
Sallie Mae's independent board members have unanimously approved the agreement and recommend that its shareholders approve the agreement.
The transaction will require the approval of Sallie Mae's stockholders, is subject to regulatory approval, and is expected to close in late 2007. Sallie Mae will not pay further dividends prior to closing of the deal.
Sallie Mae will continue to have publicly traded debt. Bank of America and JPMorgan have committed to provide debt financing for the transaction and to provide additional liquidity to Sallie Mae prior to the closing of the deal.
Chase and Bank of America also will continue to operate their independent student lending businesses.
UBS Investment Bank acted as lead financial adviser to Sallie Mae.
- Warren Buffett and Bill Gates spoke to Columbia students, and Buffett made the students a startling offer.
- They may have wrecked their companies or saved our economy. Tell us what you think.
- Big pharma embraces social media, but how much should a tightly regulated sector say on Facebook or Twitter?
- A European dating site finds lovelorn singles from one country to be consistently uglier. Which is it?
- Contributor David Pogue looks at two of the latest efforts to perfect the digital pocket camera.
- PepsiCo is ramping up its onsite health facilities for workers.













