Official Presentation: JP Morgan Acquiring Bear Stearns

Read this doc on Scribd: JPM Bear FINAL

Comments

[Karl F.]

For JPM, there is zero risk because of the Fed guaranties. Why the Fed did made the guarantee to the acquirer, but not to Bear Sterns directly?

JPM says that Bear has correctly valued its assets and that the acquisition will be accretive to earnings by 1B$/year, suggesting a Bear Sterns value close to its book value of over $80/share. The costs that JPM says it expects to have appear overstated and are mostly acquisition specific.

I think that the government put an extreme amount of pressure on Bear’s board to accept that deal at the expense of Bears shareholders in the expectation that it would calm the markets. But it may cause more trouble. The market will ask what the other financial institution are really worth if their perceived value can be destroyed so easily.

Bear’s shareholders have little to loose if they vote against that robbery.

[NY EE]

Karl, agreed. "I think we wuz robbed!" You don't need to look further than the line "accretive to earnings by $1B.

[davidsr]

B-S share holders and employees were robbed. Fed is supposed to keep balance, they panicked and stole a company.