JPMorgan, Bear Stearns amend agreement, increase purchase price

By Lisa Kerner

Charlotte, N.C., March 24 - JPMorgan Chase & Co. and Bear Stearns Cos. Inc. amended their previously announced merger agreement, upping the per-share value to $10 from $2.

The $10-per-share price is based on JPMorgan's closing price on March 20.

Under the revised terms, each share of Bear Stearns common stock will be exchanged for 0.21753 shares of JPMorgan common stock, up from 0.05473 shares, according to a JPMorgan news release.

Bear Stearns and JPMorgan also entered into a share purchase agreement under which JPMorgan will purchase 95 million newly issued shares, or 39.5% of Bear Stearns' outstanding common stock following the issuance, at the same $10-per-share price.

Purchase of the 95 million shares is expected to be completed on or about April 8, the news release stated.

"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," JPMorgan chairman and chief executive officer Jamie Dimon said in the release.

"The substantial share issuance to JPMorgan Chase was a necessary condition to obtain the full set of amended terms, which in turn, were essential to maintaining Bear Stearns' financial stability," Bear Stearns CEO Alan Schwartz added.

Both companies' boards of directors have approved the amended agreement and the purchase agreement. All of the members of the Bear Stearns board intend to vote their shares in favor of the merger.

On March 17, JPMorgan said it would acquire Bear Stearns and would immediately guarantee the trading obligations of Bear Stearns and its subsidiaries.

It was previously reported that the Federal Reserve agreed to provide special financing in connection with the deal, funding up to $30 billion of Bear Stearns' less liquid assets.

The acquisition is slated to close by the end of the second quarter, with approvals already obtained from federal agencies including the Federal Reserve and the Office of the Comptroller of the Currency.

JPMorgan is a New York financial services firm with assets of $1.6 trillion and operations in more than 60 countries.

Bear Stearns is an investment banking, securities and derivatives trading, and clearance and brokerage company based in New York.

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