Navient Rejects $3.2 Billion Takeover Bid From Canyon Capital, Platinum Equity
The student-loan servicer says $12.50-a-share proposal is too low
Navient Corp. NAVI 0.95% has received a buyout offer worth about $3.2 billion from a pair of investors that the student-loan servicer rejected as too low.
Navient’s board voted Monday to turn down the $12.50-a-share proposal from hedge fund Canyon Capital Advisors LLC and private-equity firm Platinum Equity Advisors LLC, believing it undervalues the company and is lacking in other ways, people familiar with the matter said.
The offer represents a 6.6% premium over Navient’s most recent closing price Friday of $11.73 a share. Navient’s advisers had told Canyon it would require a price of more than $15, the people said. Navient has a market value of about $3 billion.
Canyon is a longtime Navient shareholder with about a 9.9% stake, according to FactSet. Platinum is a Los Angeles-based private-equity firm.
Wilmington, Del.-based Navient services student loans. Like other servicers, its business practices have been heavily scrutinized in recent years as millions of Americans struggle with student-loan debt. The Consumer Financial Protection Bureau and several state Attorneys General have accused Navient of misleading borrowers about how to repay their loans. Navient has said the allegations are false and it is defending itself in court.
One of Navient’s complaints about the offer is that it doesn’t address how to deal with the company’s lawsuits and regulatory matters, the people said. The bidders also don’t appear to have a plan for roughly $10 billion of Navient’s debt that could come due in a change of control, they said.