JPMorgan Chase & Company is making it pretty tough for anyone else to launch a bid for Bear Stearns Cos, according to a regulatory filing Thursday.

That move comes amid reports that billionaire Joe Lewis, Bear's largest shareholder with 10 per cent, is buying up more shares.

The agreement between the banks allows JPMorgan to acquire nearly 20 per cent of Bear Stearns' stock for US$2 a share if the deal does not go through, according to a filing with the US Securities and Exchange Commission (SEC).

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 per cent stake if anybody else acquires more than 20 per cent of Bear Stearns while the deal is pending.

Buying up more shares

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 US$1.3 billion to acquire an 8.4 per cent stake last year, and his investment is worth about US$30 million under JPMorgan's US$2 per share 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 some place for Bear Stearns to call home.

The deal gives JPMorgan the right to buy Bear Stearns' 47-storey Madison Avenue headquarters within a 30-day period, according to Thursday's filing.

- AP