Sallie Mae announces $1B stock buyback program

NEWARK – Sallie Mae announced Tuesday, Feb. 2, that it was launching a $1 billion stock buyback program.

The lending giant headquartered near Newark plans to buy back shares at a price between $13.10 and $15 a share, less any applicable withholding taxes and without interest.

The company is conducting the offer by means of a procedure commonly called a “modified Dutch auction”, which allows shareholders to select the price, within the specified range, and the number of securities they are willing to sell at that price. Based on the number of securities tendered and the prices specified by the tendering shareholders, the company will determine the lowest price per share within the specified range that will enable the company to purchase securities having an aggregate purchase price of up to $1 billion. 

The billion-dollar buyback offer is larger than previous efforts, including a $600 million stock repurchase offer last year. 

The share value of Sallie Mae (SLM) rose 8% on Feb. 2 following the news of the offer. 

J.P. Morgan Securities LLC and Goldman Sachs & Co. LLC are acting as dealer managers for the offer.