How much is JP Morgan really paying for Bear Stearns?

Maybe Jamie Dimon is not as shrewd a deal maker as some think. Richard Bove, best bud to many journalists these days, tells the AP that while the per-share offer was raided to $10, the bank has additional costs. It will pay just under $1 billion to buy an additional 39.5 million Bear Stearns shares. JP Morgan also will absorb the first $1 billion in losses on the Bear Stearns portfolio. Overall, the initial costs will be about $3.4 billion, but Bove figures it will cost a lot to merge the companies. The final all-inclusive price: $65 per share. And that's too high for a very troubled firm. The real kicker here is that much of the value was assumed to be in prime brokerage. Bove suggests however, that the top clients have decamped for Goldman Sachs and others. 

For more:
- here's the AP article via CNNmoney.com
- little chance of a higher offer. Article

Related Articles:
JP Morgan bets big on Bear Stearns. Article
Joe Lewis's losing bet on Bear Stearns. Article