Idaho State Board of Education to consider extension in U of I-Phoenix negotiations • Idaho Capital Sun

This story was originally posted on IdahoEdNews.org on June 26, 2024.

The University of Idaho and the University of Phoenix want more time to talk about a deal.

And the State Board of Education will meet Friday morning to discuss an extension — which could immediately net the U of I $5 million.

If the State Board signs on, the parties would have until June 10, 2025, to reach a deal that would move the for-profit online giant under the U of I’s ownership. The State Board first endorsed the $685 million purchase in May 2023. The deal has been mired in political and legal limbo for months. However, the U of I and Phoenix have continued to negotiate past an initial, nonbinding May 31 deadline.

“The extension will allow the (U of I) time to incorporate feedback from legislators and other Idaho stakeholders into the transaction and make amendments based on the feedback,” State Board staff said in a memo released late Wednesday afternoon. “There is no commitment to a closing at this time.”

The extension has been in the works for some time. Idaho Education News reported first on many of the basics in a May 28 article.

The State Board memo spells out the details:

• Phoenix and its owner, Apollo Global Management, would have a chance to negotiate with other would-be sellers, or pursue an initial public offering.
• The U of I would immediately receive $5 million for agreeing to an extension.
• The U of I could also receive additional “breakup” fees if the purchase falls through. If the June 2025 deadline comes and goes without a sale, the U of I would receive another $5 million. If Apollo finds another buyer or pursues an IPO, the breakup fees would total $15 million.

The fees to the U of I are designed to offset the university’s consulting and legal bills. As EdNews has previously reported, the U of I has spent some $11 million on due diligence as it has reviewed a Phoenix purchase; the bulk of those fees went to U of I President C. Scott Green’s former employer, Hogan Lovells, an international law firm.

In their memo, State Board staffers say the U of I remains bullish on a Phoenix purchase. The U of I says its Phoenix business model “remains intact and is growing stronger.” The U of I has maintained it could net $10 million or more in annual revenues from Phoenix operations.

The U of I also maintains that it can navigate some turbulent political waters  — even after the state Senate voted down a bill in March designed to salvage the purchase.

“The parties … are committed to continue working collaboratively with legislators, through the 2025 legislative session if needed, to arrive at transaction acceptable to all.”

The board is scheduled to meet at 8:30 a.m. Friday.

Check Idaho Education News on Friday for coverage of the meeting. And click here for in-depth, exclusive Phoenix coverage from Idaho EdNews.