JPMorgan's Bear takeover not looking good: analyst

NEW YORK (Reuters) - JPMorgan Chase & Co.'s (JPM.N) takeover of Bear Stearns might have looked like a smart buy at fire-sale prices three months ago, but it won't be good for shareholders, a well-known banking analyst said on Monday.

JPMorgan Chief Executive Jamie Dimon was hailed in March for stepping in to snap up Bear Stearns at $2 a share -- a sale price that was later revised to $10, or about $1.5 billion. The higher price was still considered cheap at the time.

But the fact that the only asset that JPMorgan talks about now is Bear Stearns' headquarters on Madison Avenue says a lot, analyst Richard Bove of Ladenburg Thalmann & Co, a Miami-based brokerage and investment bank, told the Reuters Investment Outlook Summit in New York.

Shareholders will bear the brunt of a bad deal, he said.

"Jamie Dimon did one for the United States. He's a patriot -- but he didn't do one for JPMorgan," Bove said. "I respect Jamie Dimon for buying the company -- he did a patriotic thing."

Bear Stearns lost about $1 billion in recent years, and since the takeover was announced March 17 the bank has lost about 40 percent of its customers, Bove said.

"He's not getting anything that will add to JPMorgan's profits. Bear Stearns should have gone bankrupt because there's nothing there (but) a great building in New York -- big deal!" Bove said.

Dimon in May said JPMorgan faced many significant and some unknown risks from the Bear takeover. He disclosed that the cost of shedding Bear assets, litigation expenses and other merger-related costs would soar to $9 billion, or 50 percent more than earlier estimates.

"Jamie Dimon is very candid to tell you that this company is not going to make any significant money for the next year," Bove said. "Basically speaking, JPMorgan is at risk."

(For summit blog: summitnotebook.reuters.com/)

(Reporting by Herbert Lash; Editing by Jonathan Oatis)