JPMorgan increases Bear Stearns’ offer to $10 a share

by Gill Montia

Story link: JPMorgan increases Bear Stearns’ offer to $10 a share

JPMorgan Chase is increasing its offer for Bear Stearns, the Wall Street bank that came close to collapse earlier this month, from $2 to $10 a share.

The move follows news that Joe Lewis, the British billionaire who lost almost $1 billion when the Bear Stearns rescue was announced, is planning to block the takeover.

JPMorgan has also confirmed that it will bear the first $1 billion of losses on Bear Stearns’ assets, while the Federal Reserve will cover the remaining $29 billion.

The new offer values the stricken investment bank at $1.3 billion and Alan Schwartz, president and chief executive of Bear Stearns, says: “Our board of directors believes that the amended terms provide both significantly greater value to our shareholders, many of whom are Bear Stearns employees, and enhanced coverage and certainty for our customers, counterparties, and lenders.”

Bear Stearns’ shares have been trading above $2 since its dramatic rescue, on hopes that a counter-bidder would emerge.

Meanwhile, shares in the bank rose to $10.63 on news of the revised JPMorgan offer.