JPMorgan Chase has increased its offer for Bear Stearns five-fold to deter any third party bidders and appease shareholders.
The revised deal now values every Bear share at $10 each, up from the original $2 announced over a week ago.
In addition, JPMorgan Chase will purchase 95m newly issued shares of Bear Stearns common stock at the same $10 per share price.
It means Bear Stearns is now valued at approximately $2.1bn; much higher than the previous $236m valuation.
The Bear Stearns board has indicated it intends to vote in favour of the deal. JPMorgan Chase has also agreed to guarantee Bear Stearns' $30bn borrowings from the Federal Reserve.
"We believe the amended terms are fair to all sides and reflect the value and risks of the Bear Stearns franchise, and bring more certainty for our respective shareholders, clients, and the marketplace,” JPMorgan Chase chairman and CEO Jamie Dimon says.
Bear Stearns president and CEO Alan Schwartz adds: "The substantial share issuance to JPMorgan Chase was a necessary condition to obtain the full set of amended terms, which in turn, were essential to maintaining Bear Stearns' financial stability."
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From 6 April 2019