JPMorgan Acts to Buy Ailing Bear Stearns at Huge Discount
By ANDREW ROSS SORKIN and LANDON THOMAS Jr.
New York Times
Bear Stearns, facing collapse because of the mortgage crisis, agreed Sunday evening to be bought by JPMorgan Chase for a bargain-basement price of less than $250 million, the two companies announced.
The all-stock deal values Bear Stearns at about $2 a share, based on JPMorgan’s closing stock price on Friday, the companies said. In contrast, shares of Bear Stearns, which fell $27 on Friday, closed at $30.
A deal for Bear Stearns would end the independence of one of Wall Street’s most storied firms and help halt a sweeping panic that set in at the end of last week, causing Bear Stearns’s stock to swoon 47 percent on Friday.
The talks between the companies, which were overseen by the Federal Reserve and the Treasury Department because of their potential effect on financial markets, were rushed in an effort to reach a deal before stock markets open in Asia at 8 p.m. Eastern time.
Bear Stearns’s chief executive, Alan D. Schwartz, and other top Bear executives huddled in all-day meetings at the firm’s Madison Avenue headquarters, trying desperately to persuade skeptical potential suitors that the firm was worth buying for a price that would likely represent a steep discount to its book value, considered the truest measure of the financial health of a banking institution.
(Continued here.)
New York Times
Bear Stearns, facing collapse because of the mortgage crisis, agreed Sunday evening to be bought by JPMorgan Chase for a bargain-basement price of less than $250 million, the two companies announced.
The all-stock deal values Bear Stearns at about $2 a share, based on JPMorgan’s closing stock price on Friday, the companies said. In contrast, shares of Bear Stearns, which fell $27 on Friday, closed at $30.
A deal for Bear Stearns would end the independence of one of Wall Street’s most storied firms and help halt a sweeping panic that set in at the end of last week, causing Bear Stearns’s stock to swoon 47 percent on Friday.
The talks between the companies, which were overseen by the Federal Reserve and the Treasury Department because of their potential effect on financial markets, were rushed in an effort to reach a deal before stock markets open in Asia at 8 p.m. Eastern time.
Bear Stearns’s chief executive, Alan D. Schwartz, and other top Bear executives huddled in all-day meetings at the firm’s Madison Avenue headquarters, trying desperately to persuade skeptical potential suitors that the firm was worth buying for a price that would likely represent a steep discount to its book value, considered the truest measure of the financial health of a banking institution.
(Continued here.)
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