Thursday, September 27, 2007
Buyers (headed by J.C. Flowers) backed out of the $25.3 billion buyout of Sallie Mae deal at the current price, invoking the MAC clause and citing cuts in federal subsidies and the credit markets. They suggested the possibility of renegotiating the price. In the last sentence of its statement, the consortium said, “We have told representatives of the Sallie Mae board that we are open to discussing a revision of the transaction that reflects this new environment.” Sallie Mae, however, vows to fight. Other private equity deals that have collapsed recently include KKR's buyout of Harman International and the Fine Line-Genesco merger. WPost, Investors End Deal To Buy Sallie Mae; NYTimes, Deal at Risk, Buyers Warn Sallie Mae; WSJ, Buyout Group Balks at Sallie Mae.