NEW YORK - Bear Stearns shareholders have approved JPMorgan Chase's buyout, ending the saga of the 85-year-old pillar of Wall Street that crumbled under the weight of its own wagers on high-risk mortgages.
The tumult is far from over, however, for JPMorgan Chase & Co. It now must mesh Bear Stearns' maverick culture with its own. Nor is the turmoil over for the thousands of workers affected by the takeover.
Bear Stearns officially becomes part of JPMorgan Chase today, after a widely anticipated "yes" vote that won with 84 percent of the vote yesterday at the Bear Stearns Cos. Inc.'s Manhattan headquarters.
The deal was worth about $2.3 billion. JPMorgan is spending $1.4 billion for the firm itself, and spent an additional $900 million over the last month-and-a-half buying Bear Stearns stock to guarantee the deal would go through.
Yesterday's meeting, led by Bear Stearns' chairman James Cayne and chief executive officer Alan Schwartz, lasted less than 10 minutes, leaving some Bear Stearns' shareholders angered by the speed at which the deal closed.
"They were up there drinking coffee paid with my money . . . and we lost our money overnight," said Hannah Horgan, a Bear Stearns shareholder. "I have nothing left, and they were so calm."
In January 2007, before mortgage defaults began clobbering banks and draining demand from the debt markets, Bear Stearns traded at $171 a share. Now, JPMorgan is buying the firm for about $10 a share. The acquisition is resulting in thousands of layoffs at both Bear Stearns and JPMorgan.
Bear Stearns' troubles can be traced to last June, when two of its hedge funds collapsed. Those fund casualties not only foreshadowed the investment bank's own demise, but also effectively launched the recent credit crisis by showing how much damage the slumping mortgage market could incur on the companies that bought, repackaged and sold the loans.