JPMorgan to buy ailing Bear Stearns for $2 a share
Associated Press


Sunday, March 16, 2008

NEW YORK — JPMorgan Chase said Sunday it will acquire rival Bear Stearns in a deal valued at $236.2-million (U.S.), a stunning collapse for one of the world's largest and most venerable investment banks.

JPMorgan Chase & Co. said the $2 a share, all-stock deal has received the required approvals from the federal government and the Federal Reserve. Bear Stearns shares closed Friday at $30 a share.

The Fed will provide special financing to JPMorgan Chase for the deal, JPMorgan Chase said. The central bank has agreed to fund up to $30-billion of Bear Stearns's less liquid assets.

At almost the same time as the deal for control of Bear Stearns was announced, the Federal Reserve said it approved a cut in its lending rate to banks to 3.25 per cent from 3.50 per cent and created another lending facility for big investment banks. The central bank's official meeting is on Tuesday. Before the emergency move to lower the discount rate, which is the rate at which banks lend each other money, the Fed was widely expected to again cut its headline rate by as much as a full point to 2 per cent.

__________________
Jason Priest
1999 E430
1995 E420 - retired
1986 420SEL - retired