Vol 6 Chapter 385: 1 jump 3 feet high

At this time, it was not only Feng Yiping and the others who felt relaxed. On the night of March 15th, Paulson finally had a rare good night's sleep.

And this evening, there is CEO Jamie Dimon who fell asleep in a good mood.

The team stationed in Bear Stearns brought him good news unexpectedly. The Board of Directors of Bear Stearns had approved their acquisition proposal.

And their board of directors passed relevant resolutions this morning.

The reason is very simple.

In the 1930s of the last century, the Great Depression broke out in the United States. The U.S. 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 at the same time, that is, prohibiting financial mixing.

The bill, the "Glass-Steagall Act," stipulates that commercial banks (engaged in absorption and loan business) and investment banks (underwriting and issuance of securities) implement strict separate operations.

At that time, the Morgan Bank under the famous Morgan Consortium in the United States was divided into three, and JP Morgan became a pure commercial bank, which is today, also known as Xiaomo.

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

There is also a Morgan responsible for overseas operations, but it was acquired by a German bank in 1990.

Although after the 1997 Asian financial crisis, the barriers between the originally tightly-barred commercial banks and investment banks were loosened, the "Glass-Steagall Act" was not officially abolished, which means that, like Morgan Commercial banks like Datong cannot be involved in all the business scope of investment banks.

The acquisition of Bear Stearns means that they can now fully participate in all the businesses of investment banks, including mergers and acquisitions consulting, stock and bond underwriting, syndicated loans, speculation, arbitrage, investment management, venture funds, consulting services...

Or to put it simply, since then, it has become a bank that can be involved in almost all financial businesses like the Morgan Bank before the breakup in 1933.

In this way, although it is difficult to say that it will restore the glory of the former Morgan Bank, it undoubtedly has more advantages over other banks.

At the same time, as a world-class investment bank established in 1923 with a history of 85 years, Bear Stearns naturally has a large number of customers and a large number of partners. These are even more important assets.

Of course, there is the most important reason why Jamie Dimon falls asleep in a good mood.

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

This weekend can be said to be the weekend with the largest number of overtime.

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

A few minutes later, the news spread quickly, and before 9:30, there were already several TVs that temporarily inserted this heavy news in news programs: the board of directors, and the board of directors of Bear Stearns, have agreed. Approved acquisition proposal.

From now on, it will provide guarantees for Bear Stearns and its subsidiaries' transaction responsibilities, and provide management supervision for the latter's operations.

The Federal Reserve, the U.S. 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 Wall Street and the US economy into the abyss yesterday has been effectively contained.

However, relevant people pay more attention to the following details, and will exchange 0.05473 common shares for one Bear Stearns stock. Based on the closing price on March 15, the value of the acquisition is approximately $2 per share.

Calculated in this way, the purchase 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, with a market value of more than 20 billion US dollars. Although the company’s stock price was cut on Friday, that is, on the 14th, even if it was calculated at a closing price of nearly 30 US dollars, the total market value was also More than 3.5 billion US dollars.

For example, Bear Stearns' headquarters building, the 45-story office building in Manhattan, New York, has the lowest market price of more than $1 billion.

This can be said to be the out-and-out price of jumping off the property.

This weekend, because of the need to supervise the same large-scale Bear Stearns, and he was too busy to deal with it, Jamie Dimon would often take a leisurely look at the scenery outside the window.

To be precise, look at the building opposite.

He looked at the headquarters building in Bear Stearns across from him, and he loved it more and more.

Such a low purchase price is the main reason why he fell asleep in a good mood last night.

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

Although he knows that in the process of completing the acquisition, the price may change a bit, but the board of directors of Bear Stearns has accepted such a low starting point. Then, in the future, it will be improved. Where can it be higher?

It is still in the single digits, that is, the left and right are just the market price of the building opposite.

In addition, Bear Stearns' mortgage securities are actually already in charge of the New York Federal Reserve, and the $4 billion Blackstone loan he didn't want at the moment seems to have a good solution.

At this time, he understood very well why the old Morgan alone resolved the American economic crisis in 1907, because such behavior would bring huge returns.

With such a good mood, he assigned one thing to the secretary, "Notify John that I am very happy to see him in the office tomorrow afternoon,"

Now that the boards of directors of both parties have approved the acquisition plan, it is natural to have a substantial discussion with John about their loan to Blackstone.

The two of them got together and lent a total of US$5.5 billion to Blackstone, while Bear Stearns had to pay Feng Yiping the proceeds of their fund, but only less than US$2.75 billion.

That is, exactly half.

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

Considering the current status of Hilton and the trend of Blackstone, this loan is of course a discount. Jamie Dimon hopes that after deducting the $2.75 billion, he can still get it from Feng Yiping. At least $2 billion in cash.

…………

On March 17, at three o'clock in the afternoon on Monday, Jamie Dimon met with Feng Yiping's representative John for the first time in his office.

After yesterday's busy day and the whole night, we have begun to supervise all Bear Stearns business.

Although Bear Stearns' stock price has risen after the market opened this morning, and their stock price has fallen slightly ~www.wuxiaspot.com~, this cannot be changed. Today is the best day in the new state.

For this John who solved a problem of his own and may also come to the door with cash, Jamie Dimon gave a considerable courtesy, and he personally came to the office door to pick John in, "John, welcome your coming,"

Dimon held John by the hand and led him to sit down at the window. "Please be sure to convey my compliments to Mr. Feng on behalf of me. I have to say that few people have his vision and courage."

In any case, Feng Yiping is convinced that he has obtained such high returns by using those mortgages that are overvalued by Wall Street.

Because they obviously did not see such an opportunity.

"Thank you Dimon, Feng happened to let me convey his greetings to you, thank you and, at this critical time, once again stood up,"

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

His impression of John at this time was quite good.

As expected of Feng Yiping's men.

"You know, there are still a lot of tricky things we are currently facing, so I just asked," he said, "then John, what good news do you bring to me?"

"This is our plan for acquiring Bear Stearns and lending a loan to Blackstone," John handed him a folder.

"Yes," Dimon was still nodding when he looked at the first two pages, but when he saw the most critical clause, he couldn't believe it, "Is there a problem with this agreement?" He sat next to John. We have a total of US$5.5 billion in loans. Are you only willing to spend US$3.025 billion on acquisitions?"

"There is no problem with Dimon, this is our plan. We think that your loan to Blackstone should be discounted by 55 percent," John laughed.

"It's impossible," Dimon jumped three feet high...