The private equity firms and Harman International Industries Inc. came out with what appears to be the final outcome of their failed agreement.

The question is, should Harman have fought harder to keep the agreement intact? Should the audio equipment maker have put on its boxing gloves, much the way Sallie Mae is doing to save its deal?

Instead of buying the company for $120 per share ($8 billion), KKR and Goldman Sachs’ private equity arm will invest $400 million in Harman convertible notes. Harman shares were trading at nearly $86 on Monday.

KKR and Goldman cited a material adverse change (MAC) in Harman’s business as the reason for backing out last month. Citing the MAC, in theory, allows them to walk away from the deal without penalty, in this case a $225 million break up fee.

Indeed a week after KKR and Goldman backed out, Harman warned that quarterly profit would be less than half of what Wall Street expected.

But Harman has said it disagrees with the reasons why KKR and Goldman abandoned the full buyout. While it’s business may have slowed, Harman believes it did not change dramatically enough for the buyers to cite a MAC clause.

So if Harman believes a MAC did not occur, why not take KKR and Goldman to task and get them to cough up $225 million in cash.

Or is the $400 million debt investment better than the cash pay out. Is Harman lucky to have gotten the investment at all? Or is Harman being too easy on the buyout firms.

What do you think?

(Photo. Sidney Harman, Harman International founder. Harman Center for the Arts)