WASHINGTON
Shareholders of SLM Corp., commonly known as Sallie Mae, on Wednesday approved a private-equity firm’s $25 billion buyout of the nation’s largest student lender.
Shareholder approval had been expected. It came in a vote at a special meeting at the company’s headquarters in Reston, Va.
But uncertainty hovers over the takeover deal, which would be one of the largest private buyouts ever. The investors that agreed to buy Sallie Mae for $60 a share, J.C. Flowers & Co., Bank of America Corp. and JPMorgan Chase & Co., have said that legislation could kill the deal.
That helps explain why SLM shares are only trading around $47.
At issue are the two sides’ interpretation of their April acquisition agreement, under which significant negative developments can nullify the deal.
Legislation that passed the House last month would cut in half the interest rate on government-backed student loans a move that would be paid for by a roughly $19 billion reduction in federal subsidies to student lenders like Sallie Mae. The bill also would cap annual loan repayments at a percentage of a student’s income, protecting graduates with low salaries from having to pay back more than they can afford.
