Sallie Mae has agreed to be sold to JPMorgan Chase, Bank of America and two private equity firms for $25 billion, according to people involved in the negotiations.
The deal would move the nation’s largest education lender, officially known as the SLM Corporation, into private control amid increasing turmoil for the company.
The other two private buyers are New York-based firms which have until now have kept a relatively low profile: J.C. Flowers & Company and Friedman Fleischer & Lowe. Together, the two firms will control 50.2 percent of the company, while the banks will own the rest.
Under the terms of the agreement, the two banks are going to provide Sallie Mae with up to $200 billion of backup financing to guarantee that the company can continue to make low-cost loans in the event that its access to capital, whether through the federal government or through private markets, becomes limited.
Under the terms of the deal, they said, the buyers will pay $60 a share in cash, which represents almost a 50 percent premium over Sallie Mae’s battered share price before news of a potential buyout was reported in The New York Times last week. The share price has surged nearly 15 percent on the prospect that the company could be bought out.