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August 29, 2008 4:56:20 PM CDT

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JP Morgan Buys Bear Stearns for $2 a Share

Posted Mar 16, 08 6:35 PM CDT in Business 

(Newser) – JP Morgan has agreed tonight to buy Bear Stearns for a scant $2 a share, a bargain-basement price—stock closed at $30 a share—that demonstrates the urgency of staving off the collapse of the venerable investment bank and widespread panic in financial markets, the AP reports. The Bush administration and Federal Reserve have reportedly approved the all-stock sale, which was rushed today under federal oversight to avoid Stearns filing for bankruptcy, the New York Times reports.

Stearns, which lost 47% of its value on Friday, was under pressure to sell before markets opened tomorrow; a sticking point was how much risk JP Morgan was willing to take on, the Wall Street Journal reports. JP Morgan wanted some Bear Stearns assets—its prime brokerage business, which caters to hedge funds, is a hot item—but sources say that JP Morgan CEO James Dimon sought protection for exposure, and the Fed offered it.

Sources: Wall Street Journal, New York Times, Wall Street Journal

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The headquarters of Bear Stearns, left, and JP Morgan Chase, right, overlook midtown Manhattan on Friday, March 14, 2008 in New York.   (AP Photo/Mark Lennihan)
Bear Stearns's headquarters is shown in New York on Friday, March 14, 2008.   (AP Photo/Mark Lennihan)
Chart shows intraday trading for Bear Stearns ; 1c x 3 inches; 46.5 mm x 76.2 mm   (AP Photo)
The logo for Bear Stearns is shown at its corporate headquarters in New York, in this July 18, 2007 file photo.   (AP Photo/Mark Lennihan, file)
A sign of above the entrance to Bear Stearns headquarters is seen in New York Tuesday, Jan. 8, 2008.   (AP Photo/Jin Lee)
A woman holding an umbrella walks past the entrance of Bear Stearns headquarters in New York in this Jan. 9, 2008 file photo.   (AP Photo/Jin Lee, file)
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stock market  • Wall Street  • Bear Stearns  • acquisitions  • JPMorgan Chase  • Asian markets  • James Dimon


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