JPMorgan Makes Bear Deal Tough to Break

The agreement between the banks allows JPMorgan to acquire nearly 20 percent of Bear Stearns' stock for $2 a share if the deal does not go through, according to a filing with the Securities and Exchange Commission. This would make JPMorgan the biggest shareholder in the ailing investment bank and essentially block any third-party offers.

In addition, JPMorgan also has the right to acquire a 20 percent stake if anybody else acquires more than 20 percent of Bear Stearns while the deal is pending.

There has been speculation in recent days that billionaire financier Joe Lewis, who is already Bear Stearns' largest stockholder, has been buying up more shares. Lewis spent nearly $1.3 billion to acquire an 8.4 percent stake last year, and his investment is worth about $30 million under JPMorgan's offer.

Lewis will take "whatever action" necessary to protect his investment, according to a filing with the SEC on Wednesday. He said he may "encourage" third parties to consider other strategic transactions.

However, those third parties better have someplace for Bear Stearns to call home. The deal gives JPMorgan the right to buy Bear Stearns' 47-story Madison Avenue headquarters within a 30-day period, according to Thursday's filing.