Posted on 09/26/2007 5:26:51 PM PDT by oblomov
Bear Stearns, its shares and reputation beaten down after the collapse of two hedge funds, is in serious talks to sell as much as 20 percent of the firm, with several individual investors, including Warren E. Buffett, expressing an interest, people briefed on the discussions said today.
Other investors who have expressed an interest in buying a minority stake include the Bank of America, Wachovia and two Chinese institutions — the Citic Group and China Construction Bank, these people said.
Such expressions of interest will help bolster Bear and its chief executive, James E. Cayne, who has struggled to restore the firm’s reputation. Last week, Bear reported a 61 percent decline in third-quarter profit, the result of a disastrous quarter in which its mortgage trading business suffered a blow because of this summer’s tighter credit market.
As always in discussions surrounding any sale of the bank, price is the main issue and these talks, like others, could founder. Mr. Cayne has traditionally demanded so steep a premium from outside investors, sometimes as high as 40 percent above the share price, that a deal has been difficult to consummate.
A spokeswoman for Bear Stearns said the firm did not comment on market rumors. Bank of America and Wachovia also declined to comment. Mr. Buffet could not be reached for comment.
But, the steep decline in the firm’s share price and its relative value — it trades slightly above its book value — has stoked renewed interest as an investment. Mr. Buffet, in particular, reached out to Mr. Cayne about a month ago, the people briefed said, when the stock was approaching its one-year low of $100.
(Excerpt) Read more at nytimes.com ...
Mmmmmmmmmm.....Bear Steak!
I have heard Buffett only buys, never sells. So his valuation is based on long term, not short term market fluctuations.
For him to be interested, he must feel the market has punished Bear more than justified, for their recent difficulties.
Don’t scare me like that. I thought it meant he was betting the don’t pass line.
After giving $1 billion to the democRAT Gates Family Foundation to “dispose of it better than he can”, what’s a few more billion to the democRAT Buffet. Just have to ask myself what’s his angle.
Gee, if Buffett were really thinking about this, I’m sure Mr. “I hate derivatives and I don’t understand them and I don’t want to have anything to do with them” would release the info to the NY Times, ummm, let’s say about 1/2 hour before the trading day closed, so that his cost would rise 7-8%. Sounds about right, eh? And I guess he’d also do this to the one specific company most immersed in not-yet-marked-to-market and impossible-to-mark-to-market subprime issues...because he doesn’t give a rat’s patootie about valuations, does he?
BSC needs to get its stock pumped up for the end of the quarter and releases a rumor. Period. That’s a 100x more likely explanation in my humble opinion. They did this to HOV about 2-3 weeks ago, releasaed a rumor that WB was interested in buying HOV out. Yeah, sure.
Exactly. It allows the institutional holders of BSC to unload at a better price.
It’s only a sheer coincidence that this rumor comes out two days before the end of the quarter. [/sarc]
I saw the headline and thought food also....bear meat is very lean,unless you don’t trim the external fat! Bear pic on my about page.
As I suspected, this story has been completely debunked. Another one-day Wall St stock-pump wonder.
snicker! most people wouldn’t know the term as a complimant,thanks! ;-)
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