Discourse.net

This is seriously weird:

JPMorgan in Negotiations to Raise Bear Stearns Bid - New York Times

No, not that they’re upping the price of the deal — it looked like a possible steal for JPM, and the market had already anticipated a tripling of the offer price, albeit not the quintupling that the NYT thinks is on the table.

The weird part is this:

JPMorgan and Bear were prompted to renegotiate after shareholders began threatening to block the deal and it emerged that several “mistakes” were included in the original, hastily written contract, according to people involved in the talks.

One sentence was “inadvertently included,” according to a person briefed on the talks, which requires JPMorgan to guarantee Bear’s trades even if shareholders voted down the deal. That provision could allow Bear’s shareholders to seek a higher bid while still forcing JPMorgan to honor its guarantee, these people said.

When the error was discovered, James Dimon, JPMorgan’s chief executive, who was described by one participant as “apoplectic,” began calling his lawyers at Wachtell, Lipton, Rosen & Katz to seek a way to have the sentence modified, these people said. Finger pointing over the mistakes in the contracts began as bankers blamed the lawyers and vice versa.

Is it possible that management didn’t know about this at the time? I remember reading about it online, where it was described as something the Fed demanded as a condition of its guaranteeing such a large share of the most toxic securities.

I’d like to hear a lot more about this.