JPMorgan Chase has raised its bid for Bear Stearns to US$1.2 billion, up from last week’s offer of $232 million.
Under the revised terms, each share of Bear Stearns would be exchanged for 0.21753 shares of JPMorgan Chase, reflecting an implied value of approximately $10 per share of Bear Stearns.
In addition, the two companies have entered into a stock purchase agreement under which JPMorgan Chase will purchase 95 million newly issued shares of Bear Stearns common stock, or 39.5% of the outstanding Bear Stearns common stock after giving effect to the issuance, at the same price as provided in the amended merger agreement.
“We believe the amended terms are fair to all sides and reflect the value and risks of the Bear Stearns franchise and bring more certainty for our respective shareholders, clients, and the marketplace,” says Jamie Dimon, chairman and CEO of JPMorgan Chase. “We look forward to a prompt closing and being able to operate as one company.”
Related Stories |
The Federal Reserve Bank of New York’s $30 billion special financing associated with the transaction has also been amended so that JPMorgan Chase will bear the first $1 billion of any losses associated with the Bear Stearns assets being financed and the Fed will fund the remaining $29 billion on a non-recourse basis to JPMorgan Chase.
The closing of the sale of the 95 million shares is expected to be completed upon the conclusion of a shareholder notice period required by the NYSE, which is expected to occur on or about April 8, 2008.
To comment on this story, email craig.sebastiano@rci.rogers.com.