JPMorgan All But Locks Up Bear Stearns Vote

In a 13D filing on Bear Stearns (BSC), JPMorgan (JPM) disclosed that on March 24 it acquired 11,500,000 shares of Common Stock in the open market. The company bought the shares at $12.2369.

JPMorgan Chase acquired the shares of Common Stock in order to increase the likelihood that the plan to rescue Bear Stearns will be completed.

Based on JPMorgan Chase's current beneficial ownership and after issuance of the 95,000,000 shares to be acquired pursuant to the Share Exchange Agreement, JPMorgan Chase expects to beneficially own 107,978,295 shares or 44.86% of Issuer’s shares then outstanding.

Depending upon market conditions and other factors, JPMorgan Chase currently expects to continue to acquire beneficial ownership of additional shares of Common Stock in the open market, in privately negotiated transactions or otherwise. JPMorgan Chase expects that after such purchases (and consummation of its purchase of 95 million shares referenced above), it may own as much as 49.5% of the then outstanding Common Stock. JPMorgan Chase reserves the right to change its intention without further notice, except as may be required by law.

Comments

[Karl F.]

That implies that the issuance of the 95M shares amounts to an effective change of control, requiring a shareholder vote, if Delaware laws are correctly applied.
It also shows how determined JPM is in getting this bargain at the expense of BS shareholders.

[BalanceSheetChecker(BSC)]

It was interesting to note from the 13D filing that JP Morgan was a net seller of shares up until March 13th. (At their $2/share offer they could have used the procedes from their recent sales to buy 5.6% of Bear Stearns).

[BalanceSheetChecker(BSC)]

It is also interesting to see that on March 17, 18, and 19 JP Morgan bought 240,000 shares at an average price of $51.11 (when there was a $2 offer on the table). Can anyone suggest why?