Bear Stearns shareholders approve JP Morgan takeover

Source: Exec Digital USA

Date :5/29/2008 6:27:17 AM

Bear Stearns Cos. shareholders have approved JP Morgan Chase & Co’s $2.2 billion buyout of the investment bank following its near-collapse in March.

JP Morgan confirmed that the investment bank’s shareholders had approved the deal on Thursday and Bear Stearns will officially become part of the company by Friday.

Bear Stearns’ shares

Since offering to buy the firm in March, JP Morgan has purchased nearly half of Bear Stearns’ stock, almost guaranteeing shareholder approval.

Under an amended merger agreement agreed on March 24, JP Morgan will buy the Wall Street investment bank for about $10 a share. It had initially offered $2 per share.

In January 2007, Bear Stearns had traded at $171 a share.

Sub-prime write-downs

In December, the bank reported $1.9 billion of sub-prime write-downs, leading to a loss of $854 million.

By March it was reported that Bear Stearns faced a deepening liquidity crisis and had been unable to borrow from other dealers, leading to the intervention by the U.S. Federal Reserve.

May 29, 2008