JPMorgan: Acquired Shrs To
Help Ensure Bear Stearns 'Rescue'
DOW JONES NEWSWIRES
April 3, 2008 6:04
p.m.
By Tony Cooke
Of DOW JONES NEWSWIRES
Immediately after
announcing it had increased its bid for Bear Stearns Cos. (BSC),
JPMorgan Chase & Co. (JPM) spent nearly $141 million on Bear Stearns
stock in an effort to ensure that the deal would go through, according
to a disclosure made Thursday.
JPMorgan said it may
continue to buy shares, and could acquire up to 49.5% of Bear Stearns'
shares before the deal comes to a shareholder vote.
"JPMorgan Chase acquired
the shares...to increase the likelihood that the plan to rescue Bear
Stearns will be completed," JPMorgan said in a filing with the
Securities and Exchange Commission.
On March 24, JPMorgan and
Bear Stearns announced a revised merger deal under which JPMorgan would
increase the valuation of its all-stock bid to $10 a share. Eight days
earlier, JPMorgan had reached an agreement to acquire Bear Stearns in a
deal that was valued, at the time, at $2 a share.
The day the companies
announced the revised deal, JPMorgan spent nearly $141 million making
open-market purchases of 11.5 million shares of Bear Stearns stock,
according to Thursday's disclosure. Together with other holdings,
including call options to acquire more than a million shares, JPMorgan
on Thursday reported a total stake in Bear Stearns of 8.91%.
As part of the revised
deal, Bear Stearns agreed to issue 95 million shares to JPMorgan. After
the issuance, which is expected to be completed on or about next
Tuesday, JPMorgan said it will own 44.86% of Bear Stearns' shares.
-Tony Cooke, Dow Jones
Newswires; 202-862-1347; tony.cooke@dowjones.com
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