Sallie Mae has agreed to be sold to two private-investment funds and two banks for $25-billion, The Wall Street Journal reports. (A subscription is required to read the Journal article.)
JC Flowers & Co. and Friedman Fleischer & Lowe LLC will own 50.2 percent of the newly private company, while J.P. Morgan and Bank of America will each own 24.9 percent.
According to The New York Times, the buyers will pay $60 per share, a nearly 50-percent premium over what Sallie Mae stock was selling for last week, before word of the buyout was disclosed. As part of the deal, the banks will provide Sallie Mae with as much as $200-billion in backup financing.
The reported sale comes less than a week after the company, the nation’s largest lender to students, accepted a settlement with New York’s attorney general, Andrew M. Cuomo, and agreed to pay $2-million and stop a series of practices that reward colleges for signing up their students as borrowers.
