Billionaire Lewis lost $1.2bn on Bear Stearns

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Joe Lewis, the British billionaire, was buying more shares in Bear Stearns just hours before the company collapsed as a result of a liquidity crisis, it was revealed yesterday.

The spectacularly ill-fated share purchases meant that, as of last night, the famed currency trader had lost $1.2bn on the invest-ment, more than previously thought. In a regulatory filing, Mr Lewis revealed that he purchased 569,000 shares at $55.13 apiece just last Thursday, the day before the bank publicly admitted it was in crisis, when Bear's trading partners were already deserting in droves.

And in comments that inflamed hopes that a better deal could yet be salvaged for Bear Stearns shareholders, Mr Lewis confirmed he would take "whatever action necessary" to protect the value of his investment, now worth barely $65m. He said that could include soliciting an alternative bidder who might offer more than the $2 per share that JPMorgan Chase put on the table during Bear's hastily arranged bail-out on Sunday night.

The announcement came at the end of another day when trading in Bear Stearns shares, options and bonds continued at inflated levels, and the share price remained above the level of the JPMorgan offer.

Hedge fund analysts have been examining a string of potential trading strategies that may allow them to capitalise on anger at the knockdown price of the takeover, which Mr Lewis and others have vowed to reject in a shareholder vote.

Bear Stearns shares have consistently traded above the level of the JPMorgan offer, confounding the expectations of people close to the deal, who believe that Bear Stearns may well be worth nothing at all if the agreement is not consummated. Among those said yesterday to be buying Bear Stearns shares were holders of the company's bonds, which soared in value because of the rescue deal. The bondholders could lose money if Bear is put into liquidation instead, potentially making it worthwhile to buy the stock and vote in favour of the deal.