Investment firms finish deal swapping stake in Bear Stearns for JPMorgan stock, buyout approval looms
Investment firms finish deal swapping stake in Bear Stearns for JPMorgan stock, buyout approval looms
Bear Stearns’ stock swap complete - Investment firms finish deal swapping stake in Bear Stearns for JPMorgan stock; buyout approval still looms.
Bear Stearns Cos. has completed its sale of a 39.5% stake to JPMorgan Chase & Co. for about $10 per share, the companies said Tuesday.
JPMorgan (JPM, Fortune 500) traded 20.7 million of JPMorgan stock for 95 million shares of Bear Stearns (BSC, Fortune 500) stock. Combined with the 11.5 million Bear Stearns shares it bought on the open market April 3, JPMorgan holds a 44.9% stake in the bank.
With backing from the Federal Reserve, JPMorgan last month offered to buy Bear Stearns for $2 per share, or about $250 million. Bear Stearns was in distress because trading partners and banks grew leery of doing business with the company, due to rumors it was in danger of going bankrupt.
The offer was later raised to $10 per share. Under an amendment to the deal, Bear Stearns agreed to swap a 39.5% stake in itself for JPMorgan stock. That component of the deal was completed Tuesday.
The deal puts JPMorgan on track to receiving shareholder approval on the proposed buyout of Bear Stearns.
Bear Stearns shares slipped 23 cents to $10.44 in afternoon trading, while JPMorgan fell 44 cents to $45.10.
Investment firms finish deal swapping stake in Bear Stearns for JPMorgan stock, buyout approval looms. Editing by Elizabeth Yang