DJ UPDATE:WSJ: JPMorgan To Buy Bear Stearns - Sources>JPM BSC (Updates with deal value)
By Nikhil Deogun Of THE WALL STREET JOURNAL
NEW YORK (Dow Jones)--J.P. Morgan Chase & Co. (JPM) has agreed to buy Bear Stearns Cos. (BSC) for $2 a share in a stock-swap transaction, people familiar with the matter say.
JPMorgan Chase will exchange 0.05473 shares of JPMorgan Chase common stock per one share of Bear Stearns stock. Both boards have approved the transaction.
(This story and related background material will be available on The Wall Street Journal Web site, WSJ.com.)
The deal values Bear Stearns at just $236 million, based on the number of Bear shares outstanding as of Feb. 16. At the end of Friday, Bear's stock-market value was about $3.54 billion.
Effective immediately, JPMorgan Chase is guaranteeing the trading obligations of Bear Stearns and its subsidiaries and is providing management oversight for its operations. The deal isn't subject to any conditions, except shareholder approval and is expected to close before the end of the second quarter.
Government regulators, including the Federal Reserve and the Office of the Comptroller of the Currency, have blessed the transaction
Indeed, the Fed is taking the extraordinary step of providing special financing in connection with this transaction. The Fed has agreed to fund up to $30 billion of Bear Stearns' less liquid assets.
