The 85-year-old Wall Street bank Bear Stearns was consigned to history Thursday as shareholders approved a sale of the cash-strapped institution to rival JP Morgan.
A special meeting convened at Bear’s headquarters in midtown New York lasted less than an hour. With this formality concluded, Bear is set to be subsumed into JP Morgan with the buyout closing on Friday.
Media were barred from attending but those in the room said Bear’s chairman, Jimmy Cayne, made a brief statement expressing personal regret for the company’s collapse. “That which does not kill you makes you stronger,” said Cayne according to the Wall Street Journal’s website. “By now we all must be Hercules.” JP Morgan is buying the business for $2.2 billion in a deal supported by the Federal Reserve, which has agreed to guarantee up to $29 billion of Bear’s riskiest assets.
People arriving at the building this morning described the mood at the firm as “solemn”. An administrative assistant carrying a Bear Stearns shoulder bag said she had worked at the bank for 16 years but was expecting to leave on Monday. “It’s very sad - it’s like a family here,” said the woman, who declined to give her name. “I’m supposed to pick up my papers today.”
Bear Stearns suffered a run on the bank in March when investors lost confidence in the firm’s financial stability. The bank lost more than $10 billion of liquidity in a single day as customers, trading partners and investors fled. As many as two-thirds of Bear’s 14,000 employees are likely to lose their jobs. The bank’s demise is the biggest Wall Street bankruptcy since the collapse in 1990 of Drexel Burnham Lambert, which suffered huge losses in the junk-bond market, causing almost 10,000 job losses. (The Guardian, UK)