Well, the Sallie Mae deal may end up being the first huge victim of the crisis. The New York Times says J. C. Flowers & Company and Friedman Fleischer & Lowe have informed Sallie Mae that they will not go forward with the deal, not for $25 billion anyway. The meeting to inform Sallie Mae-advisor UBS of the decision apparently ended immediately. And Sallie Mae immediately accused the firms of violating deal commitments. The buyout firms and JP Morgan and Bank of America appear to be falling back on an "adverse material change" in the form of recent legislation that might affect subsidies. All this sounds like posturing, but the talks seem poisoned. There is a $900 million breakup fee involved. My guess is that the parties will end up back at the table, grouchy and frowning, and that the offer price may come down. But perhaps not that much.   

For more:
- here's the Times article 

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