SAN FRANCISCO (Thomson Financial) - Fitch Ratings said Monday it believes
the probability that JPMorgan Chase & Co. will complete its acquisition of the
Bear Stearns Cos. has increased under the amended terms of the merger pact.
The agency noted it has not modified its ratings on Bear, as "significant
risk" to the company's debtholders remains if the transaction is not completed.
Fitch said it believes the motivation to amend the terms of the deal on the
part of all parties involved was to reduce the uncertainty that JPMorgan will
complete the acquisition of Bear.
The amended terms call for JPMorgan to pay significantly more for Bear,
while still substantially less than the last reported book value, and to assume
more risk with respect to certain of Bear's assets.
The agreement also limits qualifying alternative bids to those from other
institutions that have, at minimum, the equivalent level of financial resources
as JPMorgan to provide the same guarantees, and, at the same time, enter
arrangements with the Federal Reserve sufficient to enable Bear to conduct
business in the ordinary course, the agency noted.
Bear shares closed the regular session at $11.25. JPMorgan's stock finished
at $46.55.
Katherine Hunt
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