The Weekend that Bear Stearns won't forget Tuesday, March 18, 2008
The Wall Street Journal has an excellent chronology of events leading up to the Bear Stearns takeover here. The piece highlights the pivotal role played by the US Treasury Secretary, Hank Paulson, in the affair. It's hard to think of anyone better qualified to hold that role and to orchestrate such matters given his former role as CEO of Goldman Sachs. His incredibly insight into Wall Street and the respect he commands amongst his former peers made him a natural leader in this crisis, something not automatically granted to a Treasury Secretary.
There is some discussion in a number of financial blogs and online papers regarding the opportunity for Bear Stearns shareholders not to vote for the deal, but there is universal acknowledgement that no alternates appear to exist plus JP Morgan now has an option on 20% of the stock which could frustrate other buyers. Moreover, it is more politically more palatable for a US bank to be the buyer than, say, a sovereign wealth fund or its' nominee.
There is also much comment regarding the pain to be borne by Bear Stearns staff - not only do they face losing their jobs at a time when hiring elsewhere has effectively dried up, but many will have been historically rewarded with stock and/or options in the bank, whose value has collapsed.