SLM Corp. filed suit last week against its proposed buyers, alleging that the JC Flowers & Co. LLC-led consortium breached its merger agreement by proposing a cut in the $25 billion transaction price. Although Flowers' group initially responded with a statement suggesting that better terms get negotiated in boardrooms instead of courtrooms, it got tough on Oct. 9 by taking its revised offer of $50 a share plus warrants (as opposed to the original $60 a share) off the table. Both sides appear to have dug in, with sources claiming that, at this point, there are no active talks taking place. SLM insists it can go it alone. Flowers' group still seems to want SLM, as evidenced by its refusal to walk away entirely. On Oct. 11, SLM reported a $344 million quarterly loss, which it attributed to derivative and hedging activities. —
Vipal Monga
See TheDeal.com story on Flowers' countersuit
See PE Hub post of one Flowers LP's thoughts on the deal
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