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Published April 14, 2008 at 1:52 PM
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 Last month's rumors that JC Flowers & Co. put in a bid for Bear Stearns Cos. before J.P. Morgan & Chase Co. are apparently true. JC Flowers offered to pay $3 billion for a 90% equity stake in Bear Stearns before J.P. Morgan agreed to purchase the troubled bank for about $240 million, as reported by SEC filings and a Bloomberg story. Bear Stearns also released an SEC filing reporting that a liquidity crisis forced the firm to accept J.P. Morgan's offer.
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This is an excerpt from the SEC filing that offers a timeline of the events that led to the J.P. Morgan offer. JC Flowers is supposedly the unnamed Bidder A.
During the morning of Saturday, March 15, 2008, the senior management of each of Bear Stearns and JPMorgan Chase, as well as their respective financial advisors, Lazard and JPMorgan Securities Inc., met at the Bear Stearns headquarters to discuss various aspects of a potential transaction between the two companies, and JPMorgan Chase conducted due diligence regarding Bear Stearns. Throughout the day, representatives of Lazard and Bear Stearns continued to have discussions with JPMorgan Chase and other parties regarding their interest in a potential transaction with Bear Stearns. Bidder A, JPMorgan Chase and two other parties that were potentially interested in acquiring certain Bear Stearns assets had been invited to the Bear Stearns headquarters to conduct due diligence. Representatives of JPMorgan Chase and Bidder A met separately with Bear Stearns' management in the morning and continued to conduct due diligence throughout the day. During the course of the day, the two other parties indicated that they were not interested in pursuing a transaction with Bear Stearns and consequently did not perform due diligence. Bear Stearns' management and legal and financial advisors continued discussions with representatives of JPMorgan Chase and Bidder A and assisted in providing those parties with information necessary for them to prepare their respective proposals for a transaction with Bear Stearns. Lazard noted that certain other parties with possible interest in a transaction with Bear Stearns indicated that they were not in a position to submit a proposal within the required timeframe.
Here is an excerpt from the Bear Stearns filing:
As of February 29, 2008, the Company had goodwill and intangible assets. Based on the proposed merger agreement, the Company believes an impairment loss for $88 million is probable, and would be recorded in the second quarter of 2008. Since the liquidity crisis and the announcement of the merger, the Company has experienced substantial deterioration of its earnings capacity. The closing of the merger is expected to occur by June 30, 2008.
-Maria Woehr See The Deal's coverage of the dealSee Bear Stearns SEC filingSee J.P. Morgan & Chase SEC filing
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