Bear Stearns
Bear Stearns[edit]
At the end of 2007, Bear Stearns was the fifth largest investment bank in the United States but its market capitalization had deteriorated through the second half of the year.[47] On Friday, March 14, 2008, Bear Stearns lost 47% of its equity market value as rumors emerged that clients were withdrawing capital from the bank. Over the following weekend, it emerged that Bear Stearns might prove insolvent, and on March 15, 2008, the Federal Reserve engineered a deal to prevent a wider systemic crisis from the collapse of Bear Stearns.[48]
On March 16, 2008, after a weekend of intense negotiations between JPMorgan, Bear, and the federal government, JPMorgan Chase announced its plans to acquire Bear Stearns in a stock swap worth $2.00 per share or $240 million pending shareholder approval scheduled within 90 days.[48] In the interim, JPMorgan Chase agreed to guarantee all Bear Stearns trades and business process flows.[49] On March 18, 2008, JPMorgan Chase formally announced the acquisition of Bear Stearns for $236 million.[47] The stock swap agreement was signed that night.[50]
On March 24, 2008, after public discontent over the low acquisition price threatened the deal's closure, a revised offer was announced at approximately $10 per share.[47] Under the revised terms, JPMorgan also immediately acquired a 39.5% stake in Bear Stearns using newly issued shares at the new offer price and gained a commitment from the board, representing another 10% of the share capital, that its members would vote in favor of the new deal. With sufficient commitments to ensure a successful shareholder vote, the merger was completed on May 30, 2008.[51]
Washington Mutual
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