JPMorgan Chase said Monday that it was significantly hiking its takeover offer for distressed bank Bear Stearns to $10 per share in a deal approved by both banks. JPMorgan Chase's increased offer comes after Bear Stearns shareholders criticized an initial offer for the distressed bank valued at a paltry $2 per share or $236 million. Some analysts had pointed out that Bear Stearns' corporate headquarters alone in New York was worth around one billion dollars. “The boards of directors of both companies have approved the amended agreement and the purchase agreement,” both banks said in a joint statement shortly after the stock market opened for trading. Bear Stearns shares, which had already been trading above the initial offer price, more than doubled. There was a backlash last week among Bear Stearns shareholders who felt the original deal undervalued the 85-year-old institution. JPMorgan Chase Chief Executive Jamie Dimon spent most of the week trying to woo Bear Stearns employees, who collectively own about a third of the company. The new deal values Bear Stearns at about $1.19 billion (¤0.77 billion) - still a fraction of what the company was worth before its sudden near-collapse earlier this month. It also includes a provision for JPMorgan to buy 95 million new Bear Stearns shares immediately, which gives it a 39.5 percent stake in the company before shareholders have even voted. The amended offer was Dimon's attempt to ward off any competition, and quickly move on with the acquisition. The two sides also changed certain guarantees JPMorgan made related to Bear Stearns' positions, though details were not immediately clear. The new agreement also calls for the Federal Reserve - which helped broker the emergency deal to save Bear Stearns from failure - to provide slightly less financing. JPMorgan will bear the first $1 billion (¤0.65 billion) of any losses linked to Bear Stearns assets being financed, while the central bank will put up the remaining $29 billion (¤18.8 billion). Alan Schwartz, Bear Stearns' embattled president and chief executive, has been vilified within the company for the past week for selling out too low. The company's 14,000 shareholders - most of whom depended on Bear Stearns' stock as part of their retirement plans - are facing significant job cuts if the deal goes through. __
