Sallie Mae Won't Take No For AnAnswer
RESTON, Va. - (12/29/04) -- Student loan giant Sallie Mae saidit won't accept the Pennsylvania Higher Education AssistanceAssociation's rejection of its takeover offer and will continue topursue the $1 billion bid. "We are disappointed but notdisheartened that PHEAA dismissed our proposal out of hand.However, we so believe in the value of this business propositionfor all parties that we do not retract our offer but rather seek afairer hearing of its details," said Alfred Lord, chief executiveof the $100 billion student lender. Under the proposal, Sallie Maewould assume operating control of the PHEAA and its $45 billionloan portfolio, while the board of the state-run student loanagency would retain control over policy. Since its move toprivatization, Sallie Mae, originally sponsored by the governmentto create a secondary market for student loans, has acquired atleast six other student lenders to double its assets and hasdeveloped into the nation's leading originator of student loans, indirect competition with many of its credit union and bank partners.The board of PHEAA, which serves 170 Pennsylvania credit unions,flatly rejected the takeover offer on Monday, saying thestate-owned agency is not for sale, especially to a for-profitcompany like Sallie Mae.