LONDON - With angry shareholders threatening to block what they see as a piddling bid for Bear Stearns by JP Morgan, it's perhaps not surprising that the buyer would attempt to placate them by quintupling its offer.
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Bear was reportedly seeking to authorize the sale of a 39.5% stake on Sunday night, which under Delaware law can be done without shareholder approval. Both Bear Stearns and JPMorgan Chase are incorporated in Delaware.
I don't know know enough about what either company is/was sitting on to really know what's going on, but we do know that the Fed/Treasury said ok to this deal based on the idea that by essentially wiping Bear's shareholders out, it wasn't in any sense a "bailout" of the company. They weren't rewarding bad behavior (though whether they were rewarding JPMorgan for bad behavior is another question).
...more here.