(Updated, 3:26 p.m., includes statements from the University of Phoenix and the University of Idaho)
With an uncertain deal with the University of Idaho, the University of Phoenix could start receiving new offers.
of phoenix Its owner, Apollo Global Management, The concept of non-exclusivity came to mind. Apollo and the U of I will continue discussions on the $685 million purchase, which has been more than a year in the making. In return, Apollo will have the power to negotiate in advance with other would-be buyers, and may even pay an I of I “break-up fee” if a deal doesn't go through.
I-affiliated Phoenix-U was put in jeopardy last March when the state Senate rejected a bill designed to restructure the purchase and allay lawmakers' concerns. Since then, the parties have said little publicly about a possible purchase. But they have been quietly talking about non-exclusivity for at least a month, according to State Board of Education emails obtained by Idaho Education News through a public records request.
April 21st: In an email to board members, State Board Executive Director Matt Freeman summarized a closed-door discussion involving U of I Chancellor C. Scott Green, General Counsel Kent Nelson, State Board member Kurt Liebich and Matt Reiber, aide to Governor Brad. small. The email details Greene's public comments at a state commission meeting that week. In it, he said the U of I university had “a few different paths” to keep the deal alive.
“The straw hat proposal being considered is that Apollo would extend the deal deadline by nine to 12 months. In return we will give up exclusivity. If Apollo sells Phoenix to another buyer, a split fee will be paid to UI. If the asset is not sold, an installment fee will accrue, which will result in a smaller amount being paid to UI. The split fee will help offset due diligence costs incurred by UI.”
May 3: Freeman writes about a May 1 meeting with Little and several members of his staff. “We agreed that state policy leaders needed a signal to let them know whether they would move forward with a basic deal. “The governor will have an informal conversation and follow up with us.”
Little's office and the state board did not respond to requests for comment.
In a statement released Tuesday afternoon, Phoenix confirmed it was interested in negotiating with other parties but said it wanted to continue talks with the University of Illinois. We are continuing discussions with state leaders.”
In a statement Tuesday, the U of I struck a similar tone. “We continue to have conversations with governors and legislators who are interested in continuing to pursue this opportunity for our state.”
Meanwhile, a looming but non-binding deadline has been postponed.
Under the original purchase agreement, either party could leave the negotiating table on Friday, May 31 by providing written notice to the other party.
“The buyer and seller agreed not to provide notice until June while contract amendments are discussed,” the U of I said Tuesday.
The I-Phoenix University partnership first became available to the public about a year ago. On May 18, 2023, the state board approved the purchase following a series of closed-door meetings and a 90-minute public hearing.
Phoenix and U of I had hoped to close the deal in early 2024. However, political and legal obstacles have delayed the process.
Lawmakers protested at the 2024 session, saying they had failed in behind-the-scenes negotiations. The Senate vote appeared to all but kill the Phoenix purchase, but Greene publicly insisted the deal was still viable.
Meanwhile, Attorney General Raúl Labrador sued the state board over the closed-door discussions, saying a series of executive branch meetings violated the Open Meetings Act. Ada County District Judge Jason Scott sided with the state board in January. Labrador has appealed to the state Supreme Court, whose oral arguments are scheduled for June 13.
An ongoing lawsuit filed last June has blocked the University of Illinois from selling bonds to finance the purchase of Phoenix.
U of I officials argued that the Phoenix purchase could reshape online education in rural Idaho and provide a steady stream of revenue from a profitable partner. U of I minimized financial risk from purchases totaling $9.9 million per year, or $50 million in total.
Meanwhile, U of I spent $11 million on a due diligence review of the purchase, with most of that money going to Green's former employer, an international law firm. The proposed “decommissioning fee” would be designed to offset these costs, according to an email sent April 21 by Freeman.
This is a developing story. Please check back for updates.
Read more: Click here for in-depth, exclusive coverage of the Phoenix proposal.