Bear Stearns deal amended
Investment bank JP Morgan Chase has announced details of a revised deal to buy troubled US bank Bear Stearns.
The new deal will value Bear Stearns’ shares at $10 – five times the previous offer of $2 announced on 16 March 2008. The board of directors at both companies have approved the amended deal.
Another amendment has also been made to ensure JP Morgan bears the first $1bn of any future losses connected to Bear’s assets. Previously, the Federal Reserve Bank of New York had promised special financing of $30bn for this purpose. Now it will fund the remaining $29bn.
“We believe the amended terms are fair to all sides and reflect the value and risks of the Bear Stearns franchise,” said Jamie Dimon, chairman and chief executive officer of JPMorgan Chase, “and bring more certainty for our respective shareholders, clients, and the marketplace. We look forward to a prompt closing and being able to operate as one company.”
The closing of the deal should occur on or around 8 April 2008, after a shareholder notice period required by the New York Stock Exchange.