share, in a hurry before Asian markets open. But JP CEO wanted the Fed's protection and its financing. How smart!
JPM 36.54, -1.57, -4.1%) will exchange 0.05473 shares of its common stock per one share of Bear Stearns stock. Both boards have approved the transaction.
The Wall Street Journal reported that 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'
The report said all sides were pushing hard to complete an agreement before financial markets in Asia open for Monday trading. The Journal quoted Treasury Department spokeswoman Michele Davis as saying, "None of these things is done until they're done. But I think everyone's expectation is sometime in the early evening hopefully" the deal will be done.
Among the issues the parties have been working to iron out is the amount of risk that J.P. Morgan would absorb in any type of transaction, according to the Journal. It reported that while J.P. Morgan is eager to snap up some of Bear Stearns assets -- such as its prime brokerage business that caters to hedge funds -- Chief Executive Officer James Dimon was reluctant to pursue the deal without certain assurances that would protect his firm's exposure, people familiar with the matter told the Journal.
