Remember that billionaire who had the 2nd largest stake in Bear?
http://dealbook.blogs.nytimes.com/2008/03/19/an-u…
yeah he isn't happy. i wouldn't be either...
Joseph C. Lewis, the reclusive billionaire investor who is Bear’s second-largest shareholder, said in a regulatory filing that he will do anything “necessary and appropriate to protect the value” of his shares. What Mr. Lewis will do is left vague, but he says he may try to encourage Bear and others to consider “strategic transactions or alternatives.”
Considering he owns a large chunk of the firm, think this'll do anything aside from slowing down the process?
probably not. All the firms are too worried about being on the Fed's bad side and the Fed really wants this deal done with asap.
But on the other hand the employees do own 30% and him and cayne i believe own another 15%. And another thing to note is that the Fed only cares about this deal so much right now because they're afraid of investor sentiment and how everyone else will react to a bulge-bracket (albeit the smallest one) going bankrupt. In a couple months or whatever if the markets settle down, the Fed probably wouldn't give a crap thus, leaving the door open for firms to swoop in with a rival bid.
ive always wondered, since GS always has close ties with the fed with their employees leaving for government jobs, like henry paulson, treasury secretary, what if gs had their blessing and came in?
Out of boredom I calculated his shares' worth.
12,136,724 shares at 67 per = roughly 813 million at 2 bucks, he will lose roughly 789 million
and JPM wants to buy the entire firm for 236 million.
Got to love finance. Although it's trading at 8 bucks, I don't think that's any consolation for him.
lewis has everything to gain and little to lose by trying to block the sale. unfortunately for him though:
-JPM has the option to buy the building and 20% of the stock regardless of whether or not the shareholders' accept -no one else has the blessing and up to $30 bn from the fed for bear's riskiest assets -shareholders have to continually reject the deal for a year and bear can't accept another bid for a year
i'm curious though if anyone has thought of some creative ways to block the sale...
Poison pill?
And I just read Stearns shares were worth $170 in 2007, wow. You really do need some serious testicular fortitude to make it.
He still has a few more billion laying around so you can't feet too bad for the guy
He just filed a 13D yesterday, which said he had been buying shares all the way up until the firm imploded. So he is the largest shareholder with over 10% of the outstanding shares
And he spent the day playing bridge, with his cellphone turned off, on the day when when Stearns was crashing.
My Trip to the Discount Window March 20, 2008 7:26 a.m.
Clicking on the crazy headlines Monday morning, I decided: I have got to go see this discount window.
Bernanke made a splash with it last summer, when the credit crunch burst on the scene. Now Bear Stearns is changing hands for lunch money and two A-Rod cards, the world is upside down, and they're promoting it again, this time even more urgently and to more customers.
But what is it?
Nobody really knows. Apparently being seen there is, for a banker, like being seen in a mosh pit for an archdeacon. That's why the Fed had to implore folks to come borrow at the discount window last summer, for the sake of the nation. Maybe now, with the deafening explosion of subprime shells making last summer look like Still-Life With Apples, it won't be such a hard sell.
I boarded a flight to Washington, put my seat back and reflected. How did we come to this pass? Somebody bought too much house, and the next thing you knew, giant faces were filling your TV screen talking about credit as "the lubricant of the financial system." Sort of a sexy and scary idea at the same time. And then this discount window.
At Dulles, I grabbed a chili dog and a map, rented a Taurus and drove right over. There was a line of cars around the block. After creeping forward for two hours, I reached a hulking machine set in an oval of grass, with a speaker and an LED display of loan terms and rates. [The Discount Window] Rhonda Mulder
The speaker crackled to life, and through it a young woman said brightly, "Thanks for visiting the discount window, take your order, please?"
"Oh, hi," I said, startled. I had come here out of wonderment—I didn't think I'd actually get lubricated. "Oh," I said again, blanking. "I'd like to borrow, like, a hundred dollars?"
"You mean a hundred thousand or a hundred million, sir?" the young woman's voice replied.
Tiny beads of sweat sprang out of the pores on my neck, just like in the cartoons. "A hundred thousand, please."
"Would you like to make that a Happy Loan?"
"Sure. I've been a little down."
"Great, that's a hundred thousand at three and a quarter, and you get ninety days stedda thirty since it's a Happy. You want swaps with that?"
"What?"
"Side of credit default swaps, sir?"
I went for a medium (they don't have small), the speaker crackled and she said, "Thank you for playing your part to restore confidence to financial markets, drive around, please."
I felt Happy. And a twinge of Moral Hazard, or was that the chili dog? I glided up to the window, where the young woman, a teenager really, in a paper hat that said FED, repeated my order and shot a stainless steel tray out at me. It bore a jumbo sealed envelope, with a LEND FREELY BUT WISELY sticker on it, and two Bratz trading cards. Sasha and Chloe.
Back at the airport, waiting at the bar, I slapped the envelope down and ordered a Bud.
"Little sightseeing?" said the bartender, whose button said he was Tony.
"Actually, I went to the discount window," I said.
Tony studied me. "The discount window," he said, adding in a low voice: "You're not worried you'll look at bit ... desperate?"
"I am a bit desperate, Tony," I said, mentally reviewing my finances.
"It's your reputation," he said. "But you know there's a taint to it. Traditionally the Fed has extended the discount window to troubled entities that couldn't borrow on the commercial paper market or elsewhere."
It was my turn to study Tony. "I'll take my chances," I said. "How much do I owe you?"
"That'll be four," he said, and then, with a sly grin: "Though considering your reputation, I really ought to ask for six."
I thought about hurdling the bar, so someday I could tell my grandchildren I once got into a fistfight in a saloon over the subprime-mortgage crisis. But in the name of global liquidity, I just laid a five beside my empty glass.
Write to Peter Jeffrey at [email protected]
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