Idaho State Board of Education Considers 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 discuss 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 Council of State signs on, the parties will have until June 10, 2025 to reach an agreement that would bring the profitable online giant under U of I’s ownership. The State Board first approved the $685 million purchase in May 2023. The deal has been in political and legal limbo for months. However, the U of I and Phoenix have continued to negotiate after an initial, non-binding deadline of May 31.

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

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

The State Council memo sets out the details:

• Phoenix and its owner, Apollo Global Management, would have the opportunity to negotiate with other potential sellers or pursue an initial public offering.
• The U of I would receive $5 million immediately if he agreed 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 initial public offering, breakup costs would total $15 million.

The U of I fees are intended to offset the university’s consulting and legal costs. As EdNews previously reported, the U of I spent approximately $11 million on due diligence in evaluating a Phoenix purchase; the bulk of those costs 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 optimistic about a Phoenix purchase. The U of I says the Phoenix business model “remains intact and continues to grow stronger.” The U of I has maintained it could generate $10 million or more in annual revenue from its Phoenix operations.

The U of I also claims it can navigate turbulent political waters — even after the Senate rejected a bill in March intended to save the purchase.

“The parties … are committed to continuing to work with lawmakers, if necessary during the 2025 legislative session, to reach a transaction that is acceptable to all.”

The board meets on Friday at 8:30 am.

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