NEW YORK (Reuters) - SLM Corp. SLM.N, commonly known as Sallie Mae, said on Wednesday its shareholders had approved the $25 billion acquisition of the student lender by a group of private equity firms and banks, but investor doubts about the deal persist.
The company in April accepted the leveraged buyout proposal, worth $60 per share, from J.C. Flowers & Co., Friedman Fleischer & Lowe, Bank of America (BAC.N) and JPMorgan Chase (JPM.N).
Since then, however, the buyers have threatened to scuttle the deal, blaming proposals to cut government subsidies to student lenders.
Doubts about the transaction have pushed Sallie Mae shares far below the buyout price, and analysts say the buyers may try to negotiate a lower price.
Sallie Mae shares were down 13 cents to $47.05 in afternoon New York Stock Exchange trade.
Sallie Mae said on August 6 that it expected the buyout to close in October.
But on the same day, a source close to the buyers said the closing conditions might not be met and that the student lender had issued its statement without consulting the buyers.
On July 11, Sallie Mae said the buyers believed the legislative proposals under consideration in the U.S. Congress "could result in a failure of the conditions to the closing of the merger to be satisfied."
Sallie Mae said it disagreed with this assertion and would proceed toward closing.
The buyout has a breakup fee of $900 million, but the buyers would not have to pay it if they could prove that legislation has a "material adverse impact" on the transaction.
A Sallie Mae spokesman said on Wednesday that shareholders with about 68 percent of its outstanding stock had voted on the takeover. Of those who voted, 99 percent were in favor of the buyout.
The vote came a day after Moody's Investors Service cut its ratings on Sallie Mae and said it may cut them again, citing expectations that legislative issues will weigh on the student lender's finances.
Moody's cut its senior unsecured debt two notches to "Baa1," the third-lowest investment-grade rating, from "A2."
Other reasons for the downgrade included "the potential effects of the acquisition ... not being completed, including SLM's reduced funding flexibility and impaired earnings capacity as a result of higher interest costs on future unsecured debt issuance," Moody's said.
(Reporting by Mark McSherry)