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JPMorgan Chase and Bear Stearns amend merger agreement

JPMorgan Chase has announced the amendment of its merger agreement to acquire The Bear Stearns Companies.

Under the revised terms, each share of Bear Stearns common stock will be exchanged for 0.22 shares of JPMorgan Chase common stock, up from 0.05 shares, reflecting an implied value of approximately $10 per share of Bear Stearns common stock based on the closing price of JPMorgan Chase common stock on the New York Stock Exchange on March 20, 2008.

In addition, JPMorgan Chase and Bear Stearns have entered into a share purchase agreement under which JPMorgan Chase will purchase 95 million newly issued shares of Bear Stearns common stock, or 39.5% of the outstanding Bear Stearns common stock after giving effect to the issuance, at the same price as provided in the amended merger agreement. The purchase of the 95 million shares is expected to be completed on or about April 8, 2008.

The boards of directors of both companies have approved the amended agreement and the purchase agreement.

The Federal Reserve Bank of New York’s $30 billion special financing associated with the transaction has also been amended so that JPMorgan Chase will bear the first $1 billion of any losses associated with the Bear Stearns assets being financed and the Fed will fund the remaining $29 billion on a non-recourse basis to JPMorgan Chase.