Chapter 2543: Jumping Three Feet High

Feng Yiping and his four companions were not the only ones who felt relaxed at this time. On the night of March 15, Paulson finally had a good sleep.

Jamie Dimon, CEO of ****, also fell asleep in a good mood this night.

The team stationed in Bear Stearns brought him good news as expected. The board of directors of Bear Stearns had approved their acquisition proposal.

And their board of directors passed the relevant resolution this morning.

The reason is very simple.

In the 1930s, the Great Depression broke out in the United States. The US government believed that super banks were the main cause of the Great Depression, so it introduced a bill in 1933 to prohibit commercial banks from engaging in investment banking business at the same time, that is, to prohibit financial mixed operations.

The bill, the Glass-Steagall Act, stipulates that commercial banks (engaged in absorption and lending business) and investment banks (underwriting and issuing securities) shall implement strict separation of business operations.

It was at that time that the Morgan Bank under the then famous Morgan Consortium in the United States was divided into three, and JP Morgan became a pure commercial bank, which is today's ****, also known as JPMorgan.

Morgan Stanley became an investment bank, commonly known as Morgan Stanley.

There was another Morgan responsible for overseas business, but it was acquired by Deutsche Bank in 1990.

Although the barriers between commercial banks and investment banks, which were originally strict, loosened after the Asian financial crisis in 1997, the Glass-Steagall Act was not officially abolished, which means that commercial banks like **** cannot get involved in all investment banking business.

The acquisition of Bear Stearns means that they can now fully get involved in all investment banking businesses, including mergers and acquisitions consulting, stock and bond underwriting, syndicated loans, speculation, arbitrage, investment management, risk funds, consulting business...

Or simply put, **** has since become a bank that can get involved in almost all financial businesses, just like Morgan Bank before the split in 1933.

In this way, although it is difficult to say that the glory of Morgan Bank has been restored, it undoubtedly has more advantages compared to other banks.

At the same time, as a world-class investment bank founded in 1923 with a history of 85 years, Bear Stearns naturally has many customers and a large number of partners, which are even more valued by ****.

Of course, there is another most important reason why Jamie Dimon went to sleep in a good mood.

This one made him still happy until the next morning when he arrived at the office.

This weekend can be said to be the weekend with the most overtime in ****.

At 9 o'clock in the morning, the news that Jamie Dimon reviewed again was quickly sent to major media.

A few minutes later, the news spread quickly, and before 9:30, several TV stations had temporarily inserted this heavy news in the news program: the board of directors and the board of directors of Bear Stearns have unanimously approved the acquisition proposal.

From now on, **** will guarantee the transaction responsibilities of Bear Stearns and its branches, and provide management supervision for the latter's operations.

The Federal Reserve, the Office of the Comptroller of the Currency and other federal agencies have also provided all necessary approvals...

For the general public, knowing this is enough, which means that the crisis that seemed to drag the entire Wall Street and the US economy into the abyss yesterday has been effectively contained.

But relevant people are more concerned about the details behind it. 0.05473 shares of common stock will be exchanged for 1 share of Bear Stearns stock. Based on the closing price on March 15, the value of the acquisition transaction is about 2 US dollars per share.

In this way, ****'s acquisition price of Bear Stearns is only 236 million US dollars.

Not to mention that Bear Stearns' stock price was as high as 170 US dollars at the beginning of the year, and its market value exceeded 20 billion US dollars. Although the company's stock price was halved on Friday, that is, on the 14th, the total market value exceeded 3.5 billion US dollars.

For example, the headquarters building of Bear Stearns, a 45-story office building in Manhattan, New York, has a market value of more than 1 billion US dollars at the lowest.

This can be said to be a real bargain price.

This weekend, the entire **** was busy with the supervision of Bear Stearns, which was also huge in scale. Jamie Dimon often took a break from his busy schedule to look at the scenery outside the window.

To be precise, he looked at the building opposite.

He looked at the headquarters building of Bear Stearns opposite, and he really loved it more and more.

Such an ultra-low acquisition price was the main reason why he fell asleep in a good mood last night.

He was very grateful to Paulson, who emphasized to him that Bear Stearns should be given a low price.

Although he knew that this price might fluctuate in the process of completing the acquisition, the board of directors of Bear Stearns had accepted such a low starting point. So, even if it was raised a little in the future, how high could it be?

It was still in the single digits, that is, it was just the market price of the building opposite.

In addition, Bear Stearns' mortgage securities were actually already under the responsibility of the New York Federal Reserve, and the $4 billion Blackstone loan that he originally didn't want would now seem to have a good solution.

At this time, he understood very well why old Morgan single-handedly resolved the economic crisis in the United States in 1907, because such behavior would bring huge returns.

With such a good mood, he gave his secretary a task, "Inform John that I will be happy to see him in the office tomorrow afternoon."

Since the boards of directors of both parties have approved the acquisition plan, then naturally they can have a substantive discussion with John about their loan to Blackstone.

The two companies have lent a total of $5.5 billion to Blackstone, and Bear Stearns has to pay the income of Feng Yiping's fund, but it is less than $2.75 billion.

That is, exactly half.

He is looking forward to getting more cash from Feng Yiping.

Considering Hilton's current situation and Blackstone's movements, this loan will naturally be discounted. Jamie Dimon hopes that after deducting the $2.75 billion, he can still get at least $2 billion in cash from Feng Yiping.

…………

At 3 p.m. on Monday, March 17, Jamie Dimon met John, the representative of Feng Yiping, in his office for the first time.

After a busy day yesterday and a whole night, **** has begun to fully supervise all the businesses of Bear Stearns.

Although Bear Stearns's stock price rose after the market opened this morning, while their stock price fell slightly, this cannot change the fact that today is the best day for the new ****.

Jamie Dimon treated John, who solved a problem for him and may also bring cash to his door, with considerable courtesy. He personally went to the door of the office to take John in, "John, welcome to your arrival,"

Dimon shook John's hand and took him to the window to sit down, "Please convey my regards to Mr. Feng. I have to say that there are really few people who can have his vision and courage,"

In any case, he was convinced that Feng Yiping had obtained such a high return by using those mortgages that were overvalued by Wall Street.

Because, they obviously did not see such an opportunity.

"Thank you Dimon, Feng also happened to ask me to convey his regards to you. Thank you and **** for standing up again at such a critical moment,"

"Thank you, haha, this is already our Morgan tradition," Dimon was in a very happy mood.

He had a very good impression of John at this time.

He was worthy of being Feng Yiping's subordinate.

"You know, we are facing a lot of difficult problems, so I asked directly," he said, "So John, what good news do you have for me?"

"This is our plan to acquire Bear Stearns and ****'s loan to Blackstone," John handed him a folder.

"Not bad," Dimon nodded when he read the first two pages, but when he saw the most critical terms, he was a little unbelieving, "Is there a problem with this agreement?" He sat next to John, "We have a total of 5.5 billion US dollars in loans, and you are only willing to spend 3.025 billion US dollars to acquire it?"

"No problem, Dimon, this is our plan, we think that your loan to Blackstone should be discounted by 55%, "John laughed.

"This is impossible," Dimon jumped three feet high...