updated 4/16/2007 10:55:17 AM ET 2007-04-16T14:55:17

Sallie Mae said on Monday it agreed to sell the company to a group of investors for about $25 billion, less than a week after it said it would stop offering perks to college employees as part of a settlement in a student loan industry probe.

The investor group led by private-equity firm J.C. Flowers & Co. will pay $60 per share for the company.

Shares of SLM Corp. were up 15 percent Friday on rumors of the deal. The stock closed at $46.76 on the New York Stock Exchange, where shares have traded in a 52-week range of $40.30 to $55.21. In premarket trading Monday, shares added $8.79, or 19 percent, to $55.55.

J.C. Flowers and private-equity firm Friedman Fleischer & Lowe will invest $4.4 billion and own 50.2 percent of the company, and Bank of America and JPMorgan Chase each will invest $2.2 billion and each will own 24.9 percent.

Sallie Mae’s independent board members have unanimously approved the agreement and recommend that its shareholders approve the agreement.

Upon closing, Sallie Mae’s current management will continue to lead the company. Sallie Mae will continue to originate student loans under its internal brands and will remain headquartered in Reston. Last year, the company originated $23.4 billion of student loans.

Chase and Bank of America also will continue to operate their independent student lending businesses. The banks have committed to provide debt financing for the transaction and to provide additional liquidity to Sallie Mae before the closing date, subject to customary terms and conditions.

UBS Investment Bank acted as lead financial adviser to Sallie Mae.

The transaction requires the approval of Sallie Mae’s stockholders and is subject to required regulatory approvals.

The deal, if approved, is expected to close in late 2007.

The agreement comes amid closer scrutiny of the student loan industry. New York Attorney General Andrew Cuomo has been investigating kickbacks by loan providers to school officials who steer students toward particular lenders.

Last week, Sallie Mae settled an investigation by Cuomo. It promised to alter its business practices and pay $2 million into a fund to educate students and parents about the financial aid industry.

© 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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