Karl Francis

JPMorgan All But Locks Up Bear Stearns Vote

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.

Official Presentation: JP Morgan Acquiring Bear Stearns

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.