With high risk and cheap stock, will Bear be sold?

By Jessica Hall

PHILADELPHIA (Reuters) - The emergency rescue of Bear Stearns Co Inc BSC.N on Friday left observers from all quarters wondering who would be the last man standing at the Wall Street bank.

When a Bear Stearns analyst moved to ask a question at a biotechnology investor meeting, Genentech Chief Executive Arthur Levinson quipped, "There's still somebody here from Bear? Let's give him a hand."

"I'm still here," said Bear Stearns analyst Mark Schoenebaum. But pointing to a JPMorgan analyst, he said, "I think I work for Geoff Meacham now."

The rescue by JPMorgan Chase & Co (JPM.N) and the Federal Reserve Bank after Bear said its cash position had deteriorated sharply put the word takeover on the tip of tongues all over Wall Street, with JPMorgan seen as a leading contender to buy out Bear Stearns.

But while Bear's cheap stock price could attract some suitors keen to buy its mortgage finance and trading assets, its liquidity problems may prevent a deal from being consummated, analysts and bankers said.

Shares of Bear Stearns, the fifth largest U.S. investment bank which has been hard-hit by its heavy exposure to the faltering U.S. mortgage market, fell 45 percent, reducing its market value by $3.2 billion to $3.64 billion.

Bear Stearns Chief Executive Alan Schwartz said the company is working with Lazard Ltd. (LAZ.N) to examine its alternatives, but it will focus on protecting customers and "maximizing shareholder value."

He said Bear's first-quarter earnings would meet Wall Street expectations.