Sallie Mae buyers offer to scrap $25 bln buyout

By Mark McSherry

NEW YORK (Reuters) - The consortium that agreed to buy student lender Sallie Mae (SLM.N: Quote, Profile, Research, Stock Buzz) for $25 billion said on Monday it has offered to terminate the transaction.

The buyer group led by private equity firm J.C. Flowers & Co said it has asked a court to declare that it is not obligated to proceed with the deal.

The consortium released a letter sent to Vice Chancellor Leo E. Strine, Jr. of Delaware Chancery Court offering to terminate the $60-a-share leveraged buyout of Sallie Mae, formally known as SLM Corp.

Sallie Mae shares were down $2.47 or about 5 percent to $45.98 in Monday afternoon trading on the New York Stock Exchange.

The group said its move was in response to a letter that Sallie Mae sent to the court on Friday asking for an expedited trial.

The consortium said it offered to terminate the merger agreement in response to Sallie Mae's assertion on Friday that the agreement is impeding the student lender's ability to run its business.

"The letter explains that by entering into an agreement to terminate the merger agreement, Sallie Mae would be free from the restrictions that it is complaining about," the consortium said in a statement.

Sallie Mae has filed a lawsuit seeking a breakup fee of $900 million from the consortium of private equity firms J.C. Flowers and Friedman Fleischer and Lowe and major banks JPMorgan Chase & Co (JPM.N: Quote, Profile, Research, Stock Buzz) and Bank of America Corp (BAC.N: Quote, Profile, Research, Stock Buzz).