JPMorgan Chase & Co. (JPM) and Bear Stearns Cos. (BSC) on Monday filed a revised merger agreement that, among other changes, will make it tougher for competing bidders to emerge.
The companies had previously disclosed that the deal would include the acquisition of nearly 40% of Bear Stearns' stock by JPMorgan in advance of the vote, giving the buyer a near-majority when combined with votes from Bear Stearns executives and directors. Monday's filing included the disclosure that, in addition, Bear Stearns can only accept a competitive offer from a "qualifying party."
For example, qualifying parties must enter into guaranties of Bear Stearns' business similar to those agreed to by JPMorgan and the Federal Reserve Bank of New York. Potential bidders must also demonstrate sufficient financial strength and must be able to enter into support and financing arrangements with the Federal Reserve, the filing said.
The new terms also contemplate the possibility of successful legal action against the deal. JPMorgan will be permitted to back out of the deal if it is legally kept from acquiring or voting the near-40% stake in Bear Stearns, the filing said.
-Tony Cooke, Dow Jones Newswires; 202-862-1347; tony.cooke@dowjones.com
(END) Dow Jones Newswires
March 24, 2008 17:49 ET (21:49 GMT)
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