JPMorgan says to buy Bear Stearns
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Mon, 17 Mar 2008 00:46:01 GMT |
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NEW YORK (Reuters) - JPMorgan Chase & Co said on Sunday it would buy stricken rival Bear Stearns for just $2 a share in an all-stock deal valuing the fifth largest investment bank at about $236 million.Under the deal, the Federal Reserve will provide special financing and has agreed to fund up to $30 billion of Bear Stearns' less liquid assets.In a statement, JPMorgan said it would exchange 0.05473 shares of its stock for one share of Bear Stearns' stock. It is guaranteeing the trading obligations of Bear Stearns and its subsidiaries.Bear Stearns' cash reserves were drained by fleeing customers on Thursday, and on Friday the bank secured emergency funding from the Federal Reserve, extended through JPMorgan.Bear Stearns' chief executive, Alan Schwartz, said in a statement the deal represented the "best outcome for all of our constituencies based upon the current circumstances."JPMorgan's chief executive Jamie Dimon said in a statement: "Bear Stearns' clients and counterparties should feel secure that JPMorgan is guaranteeing Bear Stearns' counterparty risk."The bank said the deal was expected to close by the end of the second quarter and would be accretive to JPMorgan's annual earnings.
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