Sallie Mae investor group won't renegotiate buyout plan; Nextest shares skyrocket; Nokia shares up

By Sheri Kasprzak

New York, Dec. 12 - Sallie Mae's shares fell on Wednesday on word that an investor group led by J.C. Flowers & Co. will not renegotiate a planned $25 billion buyout.

Also on Wednesday, Sallie Mae cut its profit forecast for 2008, stating it expects core earnings in 2008 to be in a range of $2.60 to $2.80 per share, down from a previously expected $3.25 per share.

In October, rumors spread that the investor group led by Flowers and including Bank of America and JPMorgan Chase & Co. had come back with a renegotiated price for a planned buyout. The investor group balked at the original $60-per-share price and fired back with a $50-per-share offer. Sallie Mae scoffed at that price, and rumor has it that the two parties came to a $56-per-share renegotiated price. Now it seems the deal is off the table entirely.

On Wednesday, shares of Sallie Mae, or SLM Corp., were off by 10.8%, or $3.45, to end the day at $28.49 (NYSE: SLM), losing another penny after the closing bell.

A trader familiar with the stock said it's hardly surprising that talks have disintegrated.

"This thing was a disaster waiting to happen," said the trader. "They may try to get another buyer but I suspect they're going to have to lower their asking price. Their target [price for 2008] is way down, so they really can't be choosers."

In other news, shares of some of the country's largest banks were still off in spite of word that the Federal Reserve is looking to give the banking system a shot in the arm next week by way of an auction.

The Fed will hold two auctions next week so that banks may bid for $40 billion in loans.

Shares of Citigroup were down 5.3%, or $1.76, to end at $31.47 (NYSE: C), while shares of Bank of America were off 2.73%, or $1.22, at $43.43 (NYSE: BAC), rebounding by 5 cents in after-hours trading. Wachovia Corp.'s stock was down $1.42, or 3.38%, to close at $40.53 Wednesday (NYSE: WB).

Looking at the country's mortgage lenders, shares of Countrywide Financial Corp. closed down 80 cents, or 7.06%, to end the day at $10.53, losing another 3 cents after hours (NYSE: CFC). Thornburg Mortgage's stock was off 53 cents, or 4.82%, to settle at $10.47 (NYSE: TMA). Meanwhile, shares of Luminent Mortgage Capital Inc., largely unmoved during the course of the day, gained 5 cents, or almost 4.6%, to end at $1.14 (NYSE: LUM).

Elsewhere, Teradyne, Inc. led merger news Wednesday with its plans to buy Nextest Systems Corp. in an all-cash transaction valued at $325 million.

Shares of Nextest zoomed on the news, skyrocketing by 62.97%, or $7.55, to close the day at $19.54 (Nasdaq: NEXT). Meanwhile, shares of Teradyne edged up by a penny to end the session at $10.99 (NYSE: TER).

Navteq shareholders OK Nokia buyout

Finally, shares of Nokia were up on Wednesday after Navteq's shareholders gave the nod to Nokia's planned $8.1 billion all-cash buyout plan.

The move, which sent shares of Nokia up 1.38%, will put the Finnish mobile giant on the GPS map. Navteq is a mapping services company.

Nokia's stock gained 54 cents to close at $39.55 and gained another 29 cents after the market closed Wednesday (NYSE: NOK).

Shares of Navteq closed the day off by 11 cents at $74.49 (NYSE: NVT).

Earlier this month, Nokia acquired Avvenu, a remote access and private sharing technology that allows users to access and view personal computer files remotely.

These moves, one analyst familiar with Nokia said Wednesday, is an indication that Nokia isn't satisfied just being another face in the mobile phone crowd.

"It really is a strategic move on their part," said the analyst. "They're branching out to other areas and this merger [with Navteq] is especially important because the GPS marketplace is a huge one. They will benefit substantially if they can move beyond just their mobile business."

Teradyne to buy Nextest

Under the terms of its merger agreement with Nextest, Teradyne will pay $20 per share for all of Nextest's outstanding stock in an all-cash deal valued at $325 million.

Teradyne makes system-on-chip tests while San Jose, Calif.-based Nextest makes flash memory test products.

The merger is set to wrap up in the first quarter of 2008.

According to a statement released Wednesday by Teradyne, the acquisition will be "slightly dilutive" to the company's 2008 GAAP earnings per share and slightly accretive to the 2008 non-GAAP earnings per share.

"Joining Teradyne puts the market presence and superior reputation of the premier ATE provider behind all that we have accomplished," said Robin Adler, chief executive officer of Nextest, in a statement.

"Teradyne's rich experience as a technology innovator along with their strong customer relationships will greatly accelerate our mission to lower test costs and to grow our business. We are very excited about the impact, potential and opportunity this combination provides to our employees, our stockholders and, most importantly, our customers."

"Nextest brings us a solid flash memory test product line, plus a very capable development and technical support organization," said Michael Bradley, CEO of Teradyne, in a news release.

Omnicell buys Rioux Vision

In other merger news Wednesday, Omnicell, Inc. wrapped its acquisition of Rioux Vision, Inc., an Elgin, S.C.-based company that designs and manufactures mobile cart technology to provide bedside point-of-care medication management.

"With the addition of mobile cart technology, Omnicell is uniquely positioned to deliver a closed-loop medication management, administration and dispensing system that greatly reduces the risk of medication errors, boost staff efficiency and advances patient safety," said a statement from Omnicell released Wednesday morning.

Shares of Omnicell were off by 45 cents, or 1.63%, to close at $27.20 but gained 20 cents after hours (Nasdaq: OMCL).

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