Sallie deal may yet go ahead, but price could fall

(Reuters) - Sallie Mae said on Wednesday a group of private equity firms and banks threatened to scuttle their buyout of the company, blaming proposed legislation to cut government subsidies to student lenders.




The deal has a break-up fee of $900 million, but if the buyers could prove the legislation has a "material adverse impact" on the transaction, they would not have to pay the fee.


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UPDATE 1-Sallie Mae says buyers believe takeover threatened

(Reuters) - Sallie Mae in April accepted a takeover proposal from private equity firms J.C. Flowers & Co. and Friedman Fleischer & Lowe, as well as JPMorgan Chase & Co. and Bank of America Corp. .




On Wednesday, Sallie Mae said the acquiring group said it believes that current legislative proposals before the U.S. House of Representatives and U.S. Senate "could result in a failure of the conditions to the closing of the merger to be satisfied."


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