Bear Holders Concede, Sort Of
Shareholders have withdrawn a request for a preliminary injunction to stop the deal, Reuters reported on Wednesday
May 8, 2008
The show must go on.Shareholders of Bear Stearns who were trying to block the embattled brokerage from joining with JPMorgan have withdrawn a request for a preliminary injunction to stop the deal, Reuters reported on Wednesday.
However, the lawsuit in New York State Supreme Court will go forward, now aimed at trying to get money on behalf of Bear holders, Reuters said, citing Daniel Krasner, senior partner at Wolf Haldenstein Adler Freeman & Herz. Krasner said the plaintiffs could be seeking damages of at least $2.8 billion.
After examining the case, "we think it's in the best interests of the Bear stockholders to let the transaction proceed and sue for damages," Krasner told Reuters. "We think that monetary recovery is all that is really available to the Bear stockholders at the end of the day."
Back in March, facing heavy criticism from disgruntled Bear shareholders and employees, JPMorgan bumped up its bid for the venerable brokerage house to $10 a share from its initial offer of $2.
As part of the amended agreement, JPMorgan bought 95 million newly issued shares, or 39.5% of Bear shares outstanding, at the same price, making it much easier for the bank to secure the majority of votes needed to get the deal done.
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