JPMorgan Chase declares steps related to Bear Stearns acquisition

by Richard Kilner

Story link: JPMorgan Chase declares steps related to Bear Stearns acquisition

Over the coming weeks JPMorgan Chase & Co. is to take a number of steps to facilitate the proper integration of the businesses of The Bear Stearns Companies Inc.

This will entail JPMorgan Chase taking on the preferred stock and debt securities that was Bear Stearns’, as well as ending the reporting obligations of the failed bank under the Securities Exchange Act of 1934

JPMorgan Chase expects the internal merger transaction to be successfully completed by 15 July, which will lead to each series of outstanding preferred stock of Bear Stearns becoming preferred stock of JPMorgan Chase, with great similarity of terms.

After this transaction has taken place, depositary shares will continue to trade on the NYSE, but will henceforth represent one-fourth interest in a share of JPMorgan Chase preferred stock and will trade under a new CUSIP number and symbol.

Then Bear Stearns intends to transfer its broker-dealer subsidiary, Bear, Stearns & Co. Inc, to JPMorgan Chase.

In effect, this will mean that almost all of Bear Stearns’ assets will become JPMorgan Chase’s.

Once Bear, Stearns & Co. Inc is transferred, JP Morgan Chase will take on responsibility for Bear Stearns’ outstanding registered U.S. debt securities, trust preferred securities obligations, outstanding foreign debt securities and guarantees of outstanding foreign debt securities issued by subsidiaries of Bear Stearns.

Pending the successful completion of the above steps, JPMorgan Chase fully and unconditionally guarantees preferred stock of Bear Stearns, and its outstanding registered U.S. debt securities and obligations relating to trust preferred securities.