Two Pension Funds Seek TRO Against Bear Stearns Stock Sale
Two Michigan-based pension funds are asking a Delaware court to issue a temporary restraining order to block a stock arrangement that facilitates JPMorgan Chase’s takeover of Bear Stearns.
The funds want to stop JPMorgan’s plan to buy 95 million newly issued shares in Bear Stearns, report the Wall Street Journal (sub. req.) and Bloomberg. The new shares would give JPMorgan close to a 40 percent stake in Bear Stearns and a better chance of winning a shareholder vote to approve the buyout.
The funds contend JPMorgan’s offer of $10 a share is “grossly inadequate.”
“The lock up stock sale is designed primarily, if not solely, to eviscerate the voting franchise of the current Bear Stearns stockholders,” said the filing with the Delaware chancery court.
“Anticipating stockholder disapproval, [the two companies] have devised an improper plan to buy the necessary votes,” the filing says.
