Sallie Mae and New York billionaire J. Christopher Flowers have come to an agreement that allows the student loan provider to continue operating without oversight from Flowers while they battle in court over their collapsed $25 billion takeover.
In a letter to Delaware Chancery Court Judge Leo Strine yesterday, Sallie explained that the waivers to the merger agreement proposed by Flowers were “acceptable” and that the two parties were now planning to find a “mutually agreeable schedule” for a full-blown trial.
Late Tuesday, Flowers and Sallie had sent separate letters to Strine complaining they couldn’t reach an agreement on the waivers and asked for a hearing in January to work it out.
Sallie boss Albert Lord sought the waivers in order to solicit takeover offers from other suitors and keep Flowers and his partners at JPMorgan Chase and Bank of America off his back while he continues to run the business.
Flowers agreed in April to pay $60 a share for Sallie, but has since tried to walk away from the deal citing the credit crunch and federal legislation that slashes subsidies to student lenders.
Sallie then slapped Flowers with a lawsuit seeking to collect the $900 million fee for breaking the merger agreement. Flowers submitted a new $50 a share offer for Sallie, but that was quickly rejected.
Some shareholders still hope that the buyout, one of the biggest private-equity deals of all time, will be renegotiated at a new price.
At Monday’s court hearing, Sallie lawyer Stephen Susman hinted the company may want to negotiate.
“The parties still . . . we have not begun talking to them . . . but negotiation would be a thing the parties might do,” Susman told Strine at the hearing.
In a recent letter to his investors, Flowers said he was still enthusiastic about acquiring the company, but not at $60 a share. zachery.kouwe@nypost.com