(Agencies)
Updated: 2008-03-24 21:17

NEW YORK -- JPMorgan Chase & Co. was discussing a deal that would increase fivefold its offer for Bear Stearns Cos. to $10 a share, The New York Times reported Monday.

Steven Raphael, a broker with Bear Stearns, enters the company headquarters on Monday, March 17, 2008 in New York. JP Morgan Chase said Sunday it will acquire rival Bear Stearns for a bargain-basement $236.2 million, a stunning collapse for one of the world's largest and most storied investment banks. [Agencies]

Bear Stearns shares jumped more than 65 percent, or $3.89, to $9.85 in premarket trading on the report.

The talks Sunday were an attempt to satisfy Bear Stearns stockholders upset over JPMorgan's offer of $2 a share for the struggling investment bank, the newspaper said on its Web site, citing people involved in the negotiations.

The original price for Bear Stearns was part of a deal struck last week at the urging of the Federal Reserve and Treasury Department.

The Fed, which would need to approve any change in the agreement, was balking at the new price, the Times said. Such opposition could postpone the new agreement or derail it entirely.

In an attempt to speed majority shareholder approval, Bear's board was trying to authorize the sale of 39.5 percent of the firm to JPMorgan, the Times said. State law in Delaware, where the companies are incorporated, allows a company to sell up to 40 percent without shareholder approval.

A spokeswoman for JPMorgan declined to comment Sunday night, the Times said. A Bear Stearns representative could not be reached.

A spokesman for the Federal Reserve would not comment on the central bank's involvement in the negotiations, but denied it had directed the original sale price, the newspaper said.