Student loan lender Sallie Mae (SLM) on Wednesday said private equity group J.C. Flowers would not revive the $25 billion buyout deal it abandoned earlier this year.
Sallie also lowered its fourth-quarter and 2008 guidance. Shares were sinking 8.3% to $29.29 in recent trading. That's 50% off its 52-week high of $58, reached in the months after Flowers offered $60 a share for Sallie.
In a statement, Sallie said that over the past eight weeks it had engaged Flowers in discussions intended to resolve differences that led Flowers to back out in September. Flowers, however, indicated "it does not wish to pursue these opportunities," Sallie said.
"The board remains committed to protecting the rights of our shareholders, and will pursue all available recourse, including the company's existing lawsuit against the buyer's group," Sallie said in the statement, referring to its legal action against Flowers and buyout partners Bank of America (BAC - Get Report) and JPMorgan Chase (JPM - Get Report).Sallie said it has "indications of interest" from 10 financial institutions for more than $30 billion in secured warehouse funding. The news comes as Sallie's earnings are taking a beating. The company reported a $344 million third-quarter loss. Student loan buyer First Marblehead (FMD) on Friday also