I was told (by a JPM Vice President) that Treasury Secretary Paulson called Dimon on the weekend, asking him to buy the bank, I forget which one. Dimon told Paulson he did not want to buy the bank, and that he was at a family function, and hung up on the Secretary. By Monday morning, though, the ink was dry on the contract.
That’s basically the way my cousin described it, but he didn’t know about the family function. JP sent around 50 people in over the weekend to value it - it was in horrible shape - which was why the initial offer was so low compared to the price it was trading at.
The point is that the Fed pretty much ordered JP to buy Bear Stearns - and JP didn’t want to. The Fed got their way - JP paid back all of the loan the Fed forced them to take.
Interesting article, I was wrong about 50 JP employees checking out Bear that weekend, it was 150:
“The deal followed a weekend of frantic negotiations to save the ailing firm. With the Fed and Treasury Department patched in by conference call from Washington, Bear Stearns executives held the equivalent of a speed-dating auction over the weekend, with prospective bidders holed up in a half dozen conference rooms at its Madison Avenue headquarters. More than 150 JPMorgan employees descended on Bear Stearns to examine the firm’s books and trading accounts.
Even as those talks took place, Bear Stearns simultaneously prepared to file for bankruptcy protection in the event a deal could not be struck, underscoring the severity of its troubles.
On Sunday night, Jamie Dimon, the chief executive of JPMorgan, held a conference call with the heads of major American financial companies to alert them to the deal and allay their concerns about doing business with Bear Stearns.
“JPMorgan Chase stands behind Bear Stearns,” Mr. Dimon said in a statement. “Bear Stearns’s clients and counterparties should feel secure that JPMorgan is guaranteeing Bear Stearns’s counterparty risk. We welcome their clients, counterparties and employees to our firm, and we are glad to be their partner.” While Bear Stearns toyed with suitors like big private equity firms like the J.C. Flowers & Company, the only meaningful bidder was JPMorgan.
The deal is a major coup for Mr. Dimon, who slept only a handful of hours over the weekend while negotiating with Bear and government officials. Over the last few years, he has focused intensely on cutting costs, improving technology and integrating JPMorgan’s disparate operations. But he also has been adamant about preparing the company for an economic downturn. “
http://www.nytimes.com/2008/03/17/business/17bear.html?pagewanted=all&_r=0