Lessons From the Failed Sallie Mae Takeover

The buyout group backed out of the Sallie Mae takeover, arguing that government regulation had triggered the MAC clause.  On the threat, Wall Street told the buyout group that it would ruin its reputation for closing deals. I laughed at the claim.  On Wall Street your reputation depends on making money and closing a terrible, losing deal to "look good" will tag you as a sucker, not as a welsher.  At issue now is who pays what.  The deal paper is before the Delaware Chancery Court.    If the MAC argument holds up, the buyout group walks away clean.  It if failed, the buyout group must pay $900 million as a breakup fee--still less than the loss if it had closed the deal.  The wild card is a specific performance argument.  Can Sallie Mae force the buyout group to close.  This is more complicated that it sounds.  Does the deal paper preserve the specific performance right (this is being litigated in several other cases)? Even if not, can a court order specific performance anyway (is the deal paper binding?)?