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Wall Street Journal, April 3, 2008 article


The Wall Street Journal

April 3, 2008 6:04 p.m. EDT


JPMorgan: Acquired Shrs To Help Ensure Bear Stearns 'Rescue'

April 3, 2008 6:04 p.m.
   By Tony Cooke 

Immediately after announcing it had increased its bid for Bear Stearns Cos. (BSC), JPMorgan Chase & Co. (JPM) spent nearly $141 million on Bear Stearns stock in an effort to ensure that the deal would go through, according to a disclosure made Thursday.

JPMorgan said it may continue to buy shares, and could acquire up to 49.5% of Bear Stearns' shares before the deal comes to a shareholder vote.

"JPMorgan Chase acquired the increase the likelihood that the plan to rescue Bear Stearns will be completed," JPMorgan said in a filing with the Securities and Exchange Commission.

On March 24, JPMorgan and Bear Stearns announced a revised merger deal under which JPMorgan would increase the valuation of its all-stock bid to $10 a share. Eight days earlier, JPMorgan had reached an agreement to acquire Bear Stearns in a deal that was valued, at the time, at $2 a share.

The day the companies announced the revised deal, JPMorgan spent nearly $141 million making open-market purchases of 11.5 million shares of Bear Stearns stock, according to Thursday's disclosure. Together with other holdings, including call options to acquire more than a million shares, JPMorgan on Thursday reported a total stake in Bear Stearns of 8.91%.

As part of the revised deal, Bear Stearns agreed to issue 95 million shares to JPMorgan. After the issuance, which is expected to be completed on or about next Tuesday, JPMorgan said it will own 44.86% of Bear Stearns' shares.

-Tony Cooke, Dow Jones Newswires; 202-862-1347;

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Copyright 2008 Dow Jones & Company, Inc. All Rights Reserved





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