Bear Stearns shareholders approve sale to JP Morgan Chase

| May 30, 2008 | 0 Comments

US banking giant, Bear Stearns is no more as its shareholders have approved the $2.2 billion sale to rival JP Morgan Chase.

A meeting took place earlier this week at Bear’s headquarters in New York where investors backed the $10-a-share bid.

The original offer of $2 a share infuriated some Bear Stearns shareholders who said the bank was being sold at a bargain price. JP Morgan was forced to revise the terms of its original $2 per share offer in an attempt to win over unhappy investors.

In March, Bear Stearns received emergency government funding when it suffered a run on the bank and investors lost confidence. Bear lost over $10 billion of liquidity in just one day as customers, trading partners and investors abandoned the bank.

Bear Stearns was Wall Street’s fifth largest investment bank and was at the centre of the US mortgage debt crisis.

JP Morgan is to take control of the stricken bank today, which will put an end to the bank’s 85-year reign.

JP Morgan is buying the business for $2.2 billion (£1.1 billion) in a deal supported by the Federal Reserve, which has agreed to guarantee up to $29 billion of Bear’s riskiest assets.

Bear Stearns’ board, which is backing the revised deal, has said it offers greater value to shareholders and certainty to employees and customers.

However, over 60% of Bear’s 14,000-strong workforce are likely to lose their job as a result of the deal.

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