Posted on 03/17/2008 6:41:34 AM PDT by OpusatFR
BEIJING — A state-owned Chinese financial firm wants to change its deal to buy into Bear Stearns Co. following the takeover of the troubled Wall Street bank, the chairman of the Chinese firm's parent said Monday.
Citic Securities Co. wants to make a "technical adjustment" in its deal, said Kong Dan, chairman of Citic Group, talking to reporters during a meeting of China's legislature. He gave no details but denied an earlier media report that quoted him as saying the deal was canceled.
Citic agreed in October to invest $1 billion in Bear. The U.S. firm was to make a similar investment in its Chinese partner and the two were to launch an Asian securities joint venture.
JPMorgan Chase & Co. and the U.S. government, in an extraordinary measure, stepped in late Sunday to save Bear Stearns, one of big five banking houses on Wall Street, which succumbed under the weight of a broadening global credit crisis. Markets from Asia to Europe tumbled on the news and U.S. stocks headed for a sharply lower open.
Citic Group is the investment arm of China's Cabinet.
Its agreement with Bear came amid a flurry of investment deals by Chinese entities in U.S. and European banks, which want to replenish their capital following the recent credit crisis.
Did I misunderstand? I think the Chinese were into buying Bear Stearns before the takeover and now want out because they will be losing money.
That’s what I understand.
i would like to make a couple technical adjustments myself
I thought this was a joke, at first.
There is no way they will take their billion dollars and turn them into 16 million if they don't have to, and I see no way to force them to turn over the cash.
Yes. But the take over by JP has been approved by the Bear Stearns board, but still requires shareholder approval.
Might be a fight if BS rallies.
Good question.
I'm sure the Chinese thought the same thing, at first.
Morgan agreed to pay something like $2/share. Was no one else allowed to bid ?
No one can do it. BOA, Wachovia, the rest are hurting as well.
If it had gone to auction there would have been no bidders. $2 / share is nominal, to provide the "substantial sum" or consideration for their to be a valid contract. On the scale of this, that part isn't real money. The real money is the guarantess on the underlying assets, and whatever had to be worked out with the counterparties.
I understand the $2 min. Makes me wonder what Bear’s HQ office was worth ?
I've seen one estimate where BS total value with around 7.7 Bil.
JP will pay around 240Mil. Not bad.
Keep in mind. JP a little over a year ago was around $40, while BS was $170. How the mighty have fallen.
I’m watching the crude oil market. If these big funds, which hold a lot of crude oil and related contracts, suddenly need to get liquid, we could see a meltdown from $108 down to $98 or less....
First, I presume that that was taken into account. Second do you know that they actually owned the land or the building? Much of Manhattan real estste is owned by others (Columbia University, Cooper Union, for example) and is leased to someone who builds a building who leases it to the tennant.
Third, what is a skyscraper headquarters for trading toxic paper worth these days? With the implosions happening in NY what is office space going to be worth? The building is not valueless. It could be turned into cheap tenements at a minimum.
There haven’t been any cheap tenements on Wall Street for several years.
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