Best hope for Bear investors: more money from JPM

By Dan Wilchins

NEW YORK (Reuters) - Bear Stearns Cos BSC.N shareholders like tycoon Joseph Lewis are hoping that another suitor will emerge to challenge JPMorgan Chase & Co (JPM.N: Quote, Profile, Research), but their best hope may be prying a few extra dollars from JPMorgan itself, analysts said.

Lewis, who owns about 8.35 percent of Bear's shares, said in a regulatory filing on Wednesday that he is prepared to "take whatever action ... necessary and appropriate to protect the value of (his) investment." That may include talking to Bear Stearns or other parties about possible options for the investment bank, the filing said.

Press reports disagree about whether Lewis is seeking another buyer for Bear, but analysts say finding one that could pass muster with the U.S. government is a tall order.

"People are fantasizing," Keith Wirtz, president and chief investment officer at Fifth Third Asset Management, which manages $22.5 billion (11.3 billion pounds), said of investors who have bid Bear Stearns substantially above JPMorgan's $2.32-a-share offer.

But by getting enough shareholders to commit to vote against the deal, they may be able to get JPMorgan to budge.

"There is a time element to this. All the other firms are in there, trying to swoop up Bear employees and customers.... If I were JPMorgan, I'd pay an extra dollar a share just to get the deal done in a reasonable period of time," said Gordon Marchand, portfolio manager at Sustainable Growth Advisers in Stamford, Connecticut.

Bear Stearns shares closed Wednesday at $5.26, more than double the value of JPMorgan's offer. Still, that was down 11 percent from their surge the day before, in what could be a sign of waning optimism about a higher price.

JPMorgan agreed to buy Bear on Sunday in a deal now worth nearly $340 million. The transaction was encouraged by the U.S. Federal Reserve, which feared that if Bear went out of business, the entire U.S. financial system could be shaken.