Sallie Mae shares jumped Thursday on new speculation the education lender will renegotiate the terms of its buyout deal with J.C. Flowers. On Wednesday, Flowers, whose investment groups include Bank of America and JP Morgan, informed Sallie Mae that it would not go through with the $25 billion transaction it had originally agreed to (full story). But, instead of entirely backing out as some investors had feared, the group of buyers said in a statement late Wednesday, “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.” The statement left SLM with some “attractive options,” noted Bear Stearns analysts. “It can fight the Flowers group in court … and risk ending up with nothing if it loses or with a $900 million break-up fee [worth only about $1.30 per share] if it wins,” the analysts said. “Or it can agree to a lower price now.” Investors seemed to think they will accept a lower buyout, as the shares of the company surged 9.1% o $49.12 on Thursday.

Sources: MarketWatch, Bloomberg

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

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

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Originaly from Source