JPMorgan Close to Deal for Bear Stearns

Top executives from both companies were in 11th-hour talks about a deal that could sell Bear Stearns for a per share price that is likely to be "considerably less" than the $30 the stock closed at Friday, according to The Wall Street Journal.

Bear Stearns shares closed down $27, or 47.4 percent, to $30 on Friday as investors worried about a possible failure of the investment bank. The drop wiped $5.7 billion from the company's market value. JPMorgan shares fell $1.57, or 4.1 percent, to $36.54 on Friday.

Both sides were in a rush to complete a deal before financial markets opened in Asia for Monday morning trading, amid fears that a crisis of confidence could roil the system further, according to sources close to the talks that were not authorized to comment on the record.

The government, led by the Treasury Department and the Federal Reserve, was reported to be closely monitoring the talks. Any deal to rescue Bear Stearns was seen as a lifeline for the entire financial services industry, helping to stave off further weakness on Wall Street.

After days of denials that it had liquidity problems, Bear was forced into a JPMorgan-led, government-backed bailout on Friday. The arrangement, the first of its kind since the 1930s, resulted in Bear getting a 28-day loan from JPMorgan with the government's guarantee that JPMorgan would not suffer any losses on the deal.

Among the Wall Street investment banks, Bear Stearns was the most closely exposed to the mortgage crisis. The collapse of two of its hedge funds last summer was seen by many as one of the triggers of the current credit crisis.

Management at Bear Stearns worked on Sunday to call clients in Asia who are worried about their business relationship, according to a Bear Stearns employee who was not authorized to speak. Many customers have pulled business from the ailing investment bank since Thursday when rumors began to circulate that it was close to failure.

Other employees were phoned on Sunday and told to show up to work at 7:30 a.m. EST, the person said.

The Journal also reported that were a deal with JPMorgan to fall apart, Bear could conceivably file for bankruptcy late Sunday before Asian financial markets opened.