1) SLM Corp., the U.S. student-loan provider known as Sallie Mae, accepted a $25 billion takeover bid from JPMorgan Chase & Co., Bank of America Corp. and two private-equity funds JC Flowers & Co., Friedman Fleischer & Lowe LLC.
2) They were offered $60 a share, 47 percent more than the closing price on April 12.
3) Sallie Mae serves a market where demand has surged an average 27 percent each of the last six years as more students borrow to attend top universities including Harvard, Princeton and Yale. And the loans are considered safe because of government guarantees. There's scope for consolidation. It should be a relatively good, moderate growth business.
4) Teaming up with the banks secures financing that will allow Sallie Mae to expand at a faster pace, and the company's strong cash flow will help the buyers pay down debt.
Besides inorganic growth and cost rationalizations, which are often enough to justify ego-soothing takeovers, this takeover promises scope for real organic growth for Sallie Mae.
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