Business Law - Contract Dispute and Negotiation

Sallie Maes High-Stakes StandoffContract dispute and re-negotiation ? certainly no wiz?s abode of fun and probably the last words a body CEO commands to hear in the midst of an acquisition deal. Sallie Mae, hotshot 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. tacit soon following, speculation to the highest degree looming student loan sway impeding Sallie Mae profitability gave the Flowers-led group pause for concern somewhat the agreed-upon price; citing the College Cost Reduction and Access Act carry through into law on Thursday by President Bush, would adversely affect the bottom-line of the refreshfully acquired company, the Flowers group stated that this was causal agency for renegotiation of the deal. Sallie Mae endanger to go to court to have the deal enforced. Sallie Mae stipulates that even if the deliverance did impact profitability, it would be a nomin al percentage and does not constitute grounds for renegotiation since the assumed drop in brook give be 6% or lower and wherefore does not constitute a ?material impact? on profitability. protect Street analyst Sameer Gokhale, of Keefe, Bruynette and Woods, thinks the impact go forth be significantly less than 6%, speculating Salle Mae?s 2008 earnings leave behind 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 foregoing to the Flowers pack making its offer. Though no one responded to calls from either side, in! cluding Blackstone, Wall Street 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 quizzical deal... If you want to get a full essay, order it on our website: BestEssayCheap.com

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