(RTTNews) - Saturday morning, financial services firm JPMorgan Chase & Co.
(JPM) said that it has completed its acquisition of The Bear Stearns Companies Inc.
(BSC), effective May 30.
The news of investment banker and brokerage company Bear Stearns' near-collapse broke in mid-March, when the its chief Alan Schwartz announced that the company's liquidity position had 'significantly deteriorated'.
Upon discovering that Bear Stearns had experienced a rapid deterioration in funding that forced them to face the real possibility of filing for bankruptcy, the Fed Reserve made a decision to act.
With a view to avert a potential disaster in the already strained financial markets the Fed intervened and facilitated the sale of the firm to JP Morgan. Initially, The Fed provided funds to JP Morgan through a short window of 28 days, with JP Morgan funding Bear Stearns and the NY Fed funding JP Morgan through its discount window.
Initially, JP Morgan announced it would purchase Bear Stearns for the bargain-barrel price of $2 a share. The price was subsequently revised upward to $10 per share.
As a result of the merger, each outstanding share of 85-year old Bear Stearns common stock was converted into the right to receive 0.21753 shares of JPMorgan Chase common stock.
The New York, New York headquartered JP Morgan said, depositary shares, each representing a one-fourth interest in a share of Bear Stearns preferred stock, will continue to trade on the New York Stock Exchange, and such of Bear Stearns' debt securities as traded on the New York Stock Exchange or American Stock Exchange immediately prior to the consummation of the merger will continue to trade on those exchanges.
JPM declined $0.57 or 1.31% and closed Friday's regular trading session at $43.00. In extended trading JPM declined 1.47% and traded at $42.93. BSC declined $0.22 or 2.30% and closed Friday's regular trading session at $9.33. The stock has traded between $2.84 and $153.95 during the past year.
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