Investing.com - Student-loan giant Navient rallied Tuesday after Canyon Capital Advisors and Platform Equity Advisors hinted at making an improved offer after an initial $3.1 billion bid was rejected.
Navient (NASDAQ:NAVI) surged 6% after rejecting the $12.50 a share offer from fund managers Canyon Capital Advisors and Platform Equity Advisors claiming it undervalued the company.
Canyon explained in a letter to Navient that it was prepared to raise the offer price if "issues" that were uncovered in due diligence were addressed.
"As we told you, that price was simply an initial indication of interest. We raised issues that we uncovered in our diligence and we told you that we had room to raise our price to the extent those issues were addressed," Canyon said.
The fund manager fueled hopes a deal could still be in the offing saying it remains prepared to continue talks with Navient on the issues raised "in the hope of ultimately arriving at a mutually satisfactory acquisition agreement."
"The fact that the board was considering an offer should be viewed as a positive, but there may be some gating factors to getting a deal done," Citigroup (NYSE:C) said. "The price offered appears to us to be significantly below what we view as fair value."
Rival student loan companies like SLM (NASDAQ:SLM) and Nelnet (NYSE:NNI) traded roughly flat and 1% higher, respectively, on the day.