Bear Stearns shares fall after chairman sells stock

NEW YORK (Reuters) - Bear Stearns Cos BSC.N shares fell nearly 5 percent on Friday after Chairman James Cayne, who was seen as opposing JPMorgan Chase & Co's (JPM.N) acquisition of the investment bank, sold his stock.

"It is symbolic that he's selling," said David Dreman, chief investment officer of Dreman Value Management LLC, a New Jersey based fund manager that has over $18 billion under management. "It lessens the potential enormously for a long drawn out battle."

"I think he knows that they're not going to get much more," said Dreman, whose firm owns JPMorgan shares.

In a filing on Thursday, Cayne, who stepped down as chief executive of Bear in January after nearly 15 years at the helm, disclosed that he sold all of the 5.6 million Bear shares he directly held. His wife also sold all of her nearly 46,000 shares.

The sale of the shares, which were worth about $1 billion last year when the stock peaked at over $170 a share, were sold for $61 million.

Last week, the New York Post reported that Cayne, together with Bear's biggest shareholder Joe Lewis, was quietly searching for a bidder to top JPMorgan.

But on Monday, JPMorgan agreed to raise its bid and said that board members agreed to vote their shares in favor of the deal. With a stake of about 5 percent, Cayne had by far the largest holding among Bear board members.

JPMorgan plans to lock up about 39.5 percent of the vote, when it closes a deal to buy 95 million new Bear shares around April 8.

Bear shares fell 55 cents to $10.68 in morning trade on the New York Stock Exchange. Despite the fall, they are still trading above JPMorgan's all-stock offer of about $9.35 a share at current prices.

Bear, which until recently ranked as the fifth-largest U.S. investment bank, suffered a liquidity crisis as declining confidence prompted a run on the bank.

(Reporting by Chris Reiter)