Sallie Mae: “So Be It”

Sallie Mae has received expressions of interest from buyers other than J.C. Flowers, company chairman Albert Lord said today during a Q3 earnings call. Lord did not provide any specifics — including if those buyers would be willing to meet the $60 per share price that Flowers has since walked back from.

The Flowers consortium remains “the logical owners for the company, but they’re not the only possible owners,” Lord said. “I think Chris Flowers does want to own Sallie Mae. But he wants to pay the wholesale price, not the retail price… So if Chris’s deal doesn’t go, so be it. We’ll start over.”

An irony to Lord’s comments was that the earnings themselves were disappointing, which would likely depress rival buyout talk. The company reported a Q3 loss of $344 million, or 85 cents per share, compared to a Q2 profit of $263 million, or 60 cents per share.

The company blamed most of its losses on losses on derivative and hedging activities, but also suggested that the buyout dispute had also played a role: “It’s costing us earnings momentum,” Lord said. If he’s right, then I wouldn’t want to be a Sallie Mae shareholder when Q4 earnings are reported — as the fight only looks to get messier.