50 Top 10 Lists of 2007

Top 10 Worst Biz Deals

#7. J.C. Flowers Reneges on Sallie Mae

Sensing a bargain, hotshot private equity billionaire, J. Christopher Flowers — along with partners Bank of America, JPMorgan Chase and Friedman Fleischer & Lowe — made a $25 billion buyout offer in April for the nation's largest student-loan provider. Six months later the group publicly lowered its offer from $60 a share to $50, on the grounds that the credit crisis and new legislation reducing student-loan subsidies would cut Sallie Mae's earnings. Sallie immediately sued Flowers et al. for breach of contract. Analysts say Flowers has the edge: If he doesn't make good on his original offer, the most he'll owe Sallie is $900 million in termination fees — about two bucks a share.

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