BILLIONAIRE INVESTOR Joe Lewis, the largest shareholder of Bear Stearns, said yesterday he may push the company to consider alternatives to the $339 million buyout offer from JPMorgan Chase.
Mr Lewis will take "whatever action" he deems necessary to protect his $1.26 billion investment in New York-based Bear Stearns, he said in a filing with the US Securities and Exchange Commission (SEC). He said he may "encourage" the firm and "third parties to consider other strategic transactions."
Mr Lewis (71) and Thunderstorm Capital's John Dorfman have threatened to oppose the JPMorgan purchase. The third-biggest US bank agreed last week to buy Bear Stearns in an all-stock deal that values the securities firm at $2.32 a share, or $339 million.
Bear Stearns stock closed at $30 two days before the firm was forced to accept JPMorgan's terms or face bankruptcy after customers and lenders abandoned the broker because of concern about a cash shortage. The Fed agreed to provide as much as $30 billion to JPMorgan to get the deal done.
"If he gets others to vote with him, he may be able to get some token increase in the price," said John Coffee, a securities law professor at Columbia University in New York, referring to Lewis.
"He's not going to get a significantly higher bid, because no one else can get the Fed's support and the Fed's financing."
Lewis paid an average of $103.89 apiece for his 12.14 million shares, according to the SEC filing. He started accumulating most of his shares last July and has lost about $1.19 billion on the investment, or almost half his wealth, which Forbes magazine estimated at $2.5 billion in its 2007 survey.
Bear Stearns has traded at a premium to the JPMorgan buyout price since the deal was announced, as traders bet that resistance from shareholders would force a higher offer.
JPMorgan is meanwhile offering bankers at Bear Stearns bonuses to stay and support the controversial takeover. JPMorgan chief executive Jamie Dimon met hundreds of Bear Stearns executives late on Wednesday.
At the meeting, Dimon, aiming to head off an exodus of staff, proposed incentives to bank employees who stay and support the deal. - (Bloomberg)
