DealZone

More than the Bear Minimum

March 24, 2008

bear32.jpgInvestors who picked up Bear Stearns’ stock above the JPMorgan offer price of $2 a share aren’t looking so crazy. The New York Times reports that offer may be boosted to $10 a share, and the stock has been heading that way in pre-market trading. JPMorgan’s Jamie Dimon needs to make sure the deal goes through, in part because his bank is on the hook to guarantee Bear’s trades even if shareholders vote down the deal.. However, the Fed is balking at the new price, and the renegotiated merger could potentially be postponed or even collapse, the Times said.

Biofuels haven’t completely lost their luster. Carlyle Group and Kohlberg Kravis Roberts are reportedly among several private equity firms keen on British biofuel additives producer Infineum. The U.K.’s Telegraph reports the Royal Dutch Shell- and ExxonMobil-owned company is valued at up to $3.87 billion. It says Apollo Management, BC Partners, Cinven, and Vestar are the other firms planning to submit bids. Infineum employs 1,600 people globally and is undergoing a strategic review initiated by its shareholders and handled by bankers at JPMorgan, the paper said.

Italian airline investors who were hoping for a few rousing encores to Alitalia‘s epic sale process can rest a bit easier today. The chairman of Air One said his company was ready to make a new offer but needed three weeks to study the ailing airliner’s books. His comments came a day after Silvio Berlusconi vowed to veto Air France-KLM‘s deal to buy Alitalia if he won power in next month’s elections. Italy’s economy minister Tommaso Padoa-Schioppa, who is overseeing the sale, and Berlusconi’s main rival for the prime minister’s post, Walter Veltroni, have said any new offer must be made in a matter of days, not weeks.

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Now that JPMorgan Chase & Co has apparently clinched the buyout deal of The Bear Stearns Companies Inc by raising its bid price, the next hurdle that JPMorgan’s Board of Directors will be confronted with are shareholder lawsuits. These lawsuits are almost inevitable. “Sure enough, on Tuesday, the Wayne County Employees’ Retirement System of Michigan and the Police and Fire Retirement System of the City of Detroit sued Bear, its directors and JPMorgan Chase,” The New York Times reported in an online article on Wednesday. The Bank’s Directors will have to advise the Senior Executives on whether to settle the suits or to allow them to be resolved in court. To reach sound judgments on these issues, the Directors will need to draw off of their knowledge business and their experience of similar shareholders lawsuits.

 

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