$1bn Loser Said Ready To Challenge Bear Deal

Joseph Lewis, one of the biggest investors in Bear Stearns, described JPMorgan's $2 a-share offer as 'derisory' when speaking on CNBC Monday. Lewis, who is thought to be sitting on losses of around $1bn since buying into Bear in September, is said to be one of a number of shareholders mulling their options and considering voting against the fire-side deal, and possibily even suing Bear executives.

MarketWatch quotes Morningstar equity analyst Ryan Lentell, who said that 'people are speculating that shareholders aren't going to approve the deal for awhile (shareholders are expected to vote on the deal before the end of the second quarter). If market conditions improve, they may be able to negotiate for a higher price, or another bidder may come to the table. John Jay, a senior analyst at Aite Group, also feels that more money could be squeezed from JPMorgan: 'JPMorgan has pretty good motivation for getting this deal done. They're getting businesses that they've wanted, and will avoid a bankruptcy situation, which may have taken a long time and is usually a complete mess'.

Investors are understandably angry that JPMorgan appears to have picked up Bear on the cheap. The Wall Street Journal quotes Scott Fenn, Managing Director of policy at proxy advisory firm Proxy Governance, who said that 'it's probably safe to assume that, with a book value of $80 a share and the building valued at $8 a share, there are going to be some shareholders who are upset and angry at a $2-a-share deal. On the other hand, it's not clear there are many alternatives'.

In the meantime, the suits have already started to file their legal briefs. According to FT Alphaville, JPMorgan is setting aside a massive $6bn for costs associated with the takeover of Bear. And litigation expenses could end up accounting for a large slice of this.