NEW YORK - JPMorgan Chase says it will acquire rival Bear Stearns for $2 a share in a move aimed at averting spreading panic in the financial markets over tightening credit.
JP Morgan says the all-stock deal has received the required approvals from the federal government and the Federal Reserve.
The Fed will provide special financing to JPMorgan Chase in connection with the deal. The central bank has agreed to fund up to $30 billion of Bear Stearns' less liquid assets.
Bear Stearns shares closed down $27, or 47.4 percent, to $30 on Friday as investors worried about a possible failure of the investment bank. The drop wiped $5.7 billion from the company’s market value. JPMorgan shares fell $1.57, or 4.1 percent, to $36.54 on Friday.
Both sides were in a rush to complete a deal before financial markets opened in Asia for Monday morning trading, amid fears that a crisis of confidence could roil the system further, according to sources close to the talks that were not authorized to comment on the record.
The government, led by the Treasury Department and the Federal Reserve, was reported to be closely monitoring the talks. Any deal to rescue Bear Stearns was seen as a lifeline for the entire financial services industry, helping to stave off further weakness on Wall Street.
After days of denials that it had liquidity problems, Bear was forced into a JPMorgan-led, government-backed bailout on Friday. The arrangement, the first of its kind since the 1930s, resulted in Bear getting a 28-day loan from JPMorgan with the government’s guarantee that JPMorgan would not suffer any losses on the deal.
Among the Wall Street investment banks, Bear Stearns was the most closely exposed to the mortgage crisis. The collapse of two of its hedge funds last summer was seen by many as one of the triggers of the current credit crisis.
Management at Bear Stearns worked on Sunday to call clients in Asia who are worried about their business relationship, according to a Bear Stearns employee who was not authorized to speak. Many customers have pulled business from the ailing investment bank since Thursday when rumors began to circulate that it was close to failure.
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Other employees were phoned on Sunday and told to show up to work at 7:30 a.m. EST, the person said.
The Journal also reported that were a deal with JPMorgan to fall apart, Bear could conceivably file for bankruptcy late Sunday before Asian financial markets opened.
Calls to Bear Stearns and JPMorgan were not immediately returned.
Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
http://www.cnbc.com/id/23662433/for/cnbc/
und mit Lehmann Brothers als nächstes die Nummer 4 drankommt, dann geht das Spiel m.E. so: