NEW YORK –. was discussing a deal that would increase fivefold its offer for . to $10 a share, reported Monday.
The talks Sunday were an attempt to satisfystockholders upset over JPMorgan’s offer of $2 a share for the struggling investment bank, the newspaper said on its Web site, citing people involved in the negotiations.
The original price for Bear Stearns was part of a deal struck last week at the urging of theand .
The Fed, which would need to approve any change in the agreement, was balking at the new price, the Times said. Such opposition could postpone the new agreement or derail it entirely.
In an attempt to speed, Bears board was trying to authorize the sale of 39.5 percent of the firm to JPMorgan, the Times said. State law in , where the companies are incorporated, allows a company to sell up to 40 percent without shareholder approval.
A spokeswoman for JPMorgan declined to comment Sunday night, the Times said. A Bear Stearns representative could not be reached.
A spokesman for the Federal Reserve would not comment on the central banks involvement in the negotiations, but denied it had directed the original sale price, the newspaper said.
JPMorgan Negotiating for Bear Stearns?
The sweetened offer is intended to win over stockholders who vowed to fight the original fire-sale deal, struck only a week ago at the behest of the Federal Reserve and Treasury Department.
Under the terms being discussed, JPMorgan would pay $10 a share in stock for Bear, up from its initial offer of $2 a share — a figure that represented a mere one-fifteenth of Bear’s going market price.
The Fed, which must approve any new deal, was balking at the new offer price on Sunday night after several days of frantic, secret negotiations, these people said. As a result, it was still possible the renegotiated deal might be postponed or collapse entirely, said these people, who were granted anonymity because of their confidentiality agreements.
If the Fed were to reject the new proposal, it could set off a furor among shareholders of both firms that the government was preventing them from making a fair deal.