Business Law - Contract Dispute and Negotiation

Sallie Maes High-Stakes StandoffContract dispute and re-negotiation ? certainly no wiz?s pedestal of fun and probably the last words a incarnate CEO commands to hear in the midst of an acquisition deal. Sallie Mae, one and only(a) of the nation?s largest student loan lenders, agreed in April to sell to J.C. Flowers, J.P Morgan, and Bank of America for the sum of $25 billion. nonetheless soon following, speculation to the highest degree looming student loan mold impeding Sallie Mae profitability gave the Flowers-led group pause for concern close the agreed-upon price; citing the College Cost Reduction and Access Act economize into law on Thursday by President Bush, would adversely affect the bottom-line of the new-madely acquired company, the Flowers group stated that this was intellect for renegotiation of the deal. Sallie Mae be to go to court to have the deal enforced. Sallie Mae stipulates that even if the delivery did impact profitability, it would be a nomin al percentage and does not constitute grounds for renegotiation since the assumed drop in ease up give be 6% or lower and thus does not constitute a ?material impact? on profitability. protect Street analyst Sameer Gokhale, of Keefe, Bruynette and Woods, thinks the impact pull up stakes be significantly less than 6%, speculating Salle Mae?s 2008 earnings pass on fall a mere 1.

5% (Eavis, 2007), hardly grounds for renegotiation and rumors bristle that there may soon be a jibe bid if the dispute continues. The Blackstone Group was courting Sallie Mae preliminary to the Flowers pack making its offer. Though no one responded to calls f rom every side, including Blackstone, Wall S! treet was ablaze with rumor that Sallie Mae had asked the buyers to name their new price. It is expect that if the new price is significantly lower, rival bids will develop and according to Peter Eavis, by publicly wondering(a) deal... If you want to get a full essay, order it on our website: BestEssayCheap.com

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