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Navient
Corp.
NAVI 0.95%
received a tender offer worth about $ 3.2 billion from a couple of investors that the student loan service provider rejected as too low.
Navient's board said Monday it had decided to reject the proposed $ 12.50 per share of Canyon Capital Advisors LLC and private equity firm Platinum Equity Advisors LLC, saying it -validated society and lacked other means.
The offer represents a premium of 6.6% compared to the last closing price of Navient, Friday, of $ 11.73 per share. Navient's advisers told Canyon that it would take more than $ 15, according to a letter sent by Navient to the fund and made public Monday. Navient has a market value of about $ 3 billion.
The Wall Street Journal for the first time informed of the offer and Navient rejected it earlier Monday.
According to FactSet, Canyon is a long-time shareholder of Navient, with a stake of about 9.9%. Platinum is a Los Angeles-based private equity firm.
Navient student loans, based in Wilmington, Delaware, processing billing and assisting borrowers with loan repayment plans and consolidations. Like other service providers, its business practices have been the subject of extensive scrutiny in recent years, as millions of Americans struggled with debts. student loan. The Bureau of Consumer Financial Protection and several attorneys general accused Navient of misleading borrowers on how to repay their loans. Navient said the allegations were false and that he was defending himself in court.
One of Navient's complaints about the offer, according to the letter, is that it does not say how to deal with the company's lawsuits and regulatory issues. The company also said it believed the bidders did not seem to have a plan for the $ 10 billion worth of Navient's debt that could be due to a change of control.
Navient said that Canyon and Platinum contacted her in October to make an offer and that the three parties had entered into a confidentiality agreement to allow so-called "due diligence". Canyon's adviser said at one point that the bid could be between $ 14 and $ 15 per share, which, according to Navient's advisers, was too low, according to Navient's letter.
The confidentiality agreement provided for a standstill period that would have prevented Canyon from launching a proxy battle, which ended Friday. It was at that time that Canyon introduced the offer, Navient said.
Navient said Canyon, as part of its bid, was asking the company to extend by several weeks its end-of-February deadline for appointing directors, to give it more time to do the due diligence, but that Navient had rejected the request. Canyon, a sometimes activist investor who launched a proxy fight in 2016 against
Ambac Financial Group
Inc.
-Which was later withdrawn-still until February 23 to appoint the directors.
Corrections & Amplifications
Canyon Capital Advisors is based in Los Angeles. An earlier version of this article incorrectly stated that Canyon is based in New York. (February 18, 2019)
Write to Cara Lombardo at [email protected]
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