Sallie Mae announced Wednesday it was told by the group who was planning to buy the company that they will no longer go through with the $25.3 billion deal under the current terms. SLM said it sees no reason for the group, which includes J.C. Flowers, JP Morgan, and Bank of America, to back out of the $60/share agreement. The education lender said it “intends to pursue all remedies available to it to the fullest extent permitted by law.” Problems in the deal stem from a House bill that would slash subsidies for student-loan companies (full story). The group of buyers likely sees the bill greatly devaluing the company; Sallie Mae admitted Wednesday that the new law would cut income 1.8% - 2.1% over the next five years. Sallie Mae’s shares were rocked early by the news, but bounced back to close down 2.7% to $45.01.

Sources: TheStreet.com, Bloomberg, CNNMoney

Commentary: Prospective Buyers of Sallie Mae Want Discount — NYT Harman Buyout Shelved: Bleak Outlook for SLM Corp and First Data Deals

Stocks/ETFs to watch: SLM. Competitors: STU, KEY. ETFs: PGF, IYF

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Originaly from Source