Business Law - Contract Dispute and Negotiation

Sallie Maes High-Stakes StandoffContract dispute and re-negotiation ? certainly no wiz?s domicile of fun and probably the last words a corporeal CEO commands to hear in the midst of an acquisition deal. Sallie Mae, peerless 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. be quiet soon following, speculation to the highest degree looming student loan overshadow impeding Sallie Mae profitability gave the Flowers-led group pause for concern most the agreed-upon price; citing the College Cost Reduction and Access Act release into law on Thursday by President Bush, would adversely affect the bottom-line of the new-fashionedly acquired company, the Flowers group stated that this was rationality for renegotiation of the deal. Sallie Mae be to go to court to have the deal enforced. Sallie Mae stipulates that even if the scrimping did impact profitability, it would be a nomi nal percentage and does not constitute grounds for renegotiation since the assumed drop in profit give be 6% or lower and then(prenominal) does not constitute a ?material impact? on profitability. protect Street analyst Sameer Gokhale, of Keefe, Bruynette and Woods, thinks the impact imparting be significantly less than 6%, speculating Salle Mae?s 2008 earnings will 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 front to the Flowers pack making its offer. Though no one responded to calls from each side, includi! ng 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 call into question deal... If you want to get a full essay, order it on our website: BestEssayCheap.com

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