March 25 (Bloomberg) -- JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon is paying four times more for Bear Stearns Cos. than he planned just nine days ago -- and is still managing to get plaudits for it.

By adapting to a swiftly changing environment, Dimon salvaged a deal that had drawn fire from Bear Stearns shareholders dismayed at the initial terms brokered by the Federal Reserve to prevent the securities firm's collapse.

That all-stock deal, agreed to on March 16, had valued Bear Stearns at $2.52 a share, based on last week's closing price. Dimon and his team yesterday agreed to quadruple the price to $10 a share and negotiated to buy 39.5 percent of the company without a shareholder vote, enhancing chances that the deal will close quickly and helping New York-based JPMorgan retain Bear Stearns employees and clients.

``Jamie Dimon was in the right place at the right time and he pulled the trigger fast,'' said David Kotok, chief investment officer of Vineland, New Jersey-based Cumberland Advisors Inc., which invests in exchange-traded funds and has almost $1 billion under management. ``That's the job of a CEO at a time like this.''

Dimon, 52, has led JPMorgan through the recent market turmoil relatively unscathed compared with its peers. The firm has taken $3.7 billion in writedowns on assets and loan losses, while Citigroup Inc. has had $22.4 billion and Bank of America Corp. $7.9 billion, according to data compiled by Bloomberg.

`On His Radar'

``Given the way that credit markets have deteriorated over the last six months or so, I bet an acquisition like this has been high on his radar screen,'' said William Fitzpatrick, an equity analyst at Racine, Wisconsin-based Optique Capital Management, which oversees $1.6 billion of assets, including JPMorgan shares.

The bank anticipates $6 billion in costs related to the Bear Stearns purchase. JPMorgan said in a Feb. 29 regulatory filing that it would lose $450 million in the first quarter on its home-equity loans, a number that could double to $900 million by the end of the year.

``What's really important is that we make it successful going forward, save as many good people as possible, preserve the businesses, and integrate it properly,'' Dimon said in an interview today. ``The goal is to get it done as quickly as possible because that's what's best for the system, it's best for the Fed, it's the best for JPMorgan, and all of the employees and clients of Bear Stearns.''

Amaranth Trade

This isn't the first time Dimon has stepped into a crisis situation and leveraged JPMorgan's position. In November 2006, the bank and Citadel Investment Group LLC took over energy- trading positions from failing hedge fund Amaranth Advisors LLC. JPMorgan sold the trades two weeks later to Citadel for $725 million.

Dimon learned the art of deal-making from his mentor, Sanford ``Sandy'' Weill, with whom he built what is now Citigroup into the largest U.S. bank. Vikram Pandit, the company's current CEO, is planning to dispose of almost $200 billion of the lender's assets to shore up capital. Doing so may lower the bank's ranking to third place.

Weill, now 75, hired Dimon in 1982 after reading a term paper he wrote as a Tufts University undergraduate analyzing Weill's deal-making.

Dimon, who received his master's degree in business administration from Harvard University, helped Weill plot his acquisitions over a 16-year period as they bought and sold companies for American Express Co. and later for Primerica Corp. and Travelers Group Inc.

Broker, Dealer

But Weill and Dimon, whose grandfather and father were stockbrokers, clashed amid the tension of merging Travelers and Citicorp Inc. in 1998. Dimon was fired within weeks of the merger after the Salomon Smith Barney brokerage unit he ran reported a $1.33 billion quarterly loss.

Nearly 17 months later, in 2000, Dimon resurfaced in the top job at Chicago-based Bank One Corp. At Bank One, Dimon pushed the firm back to profitability by cutting costs and the firm's dividend and writing off bad debt.

In 2004, Dimon played a role in brokering the $58 billion takeover of Bank One by JPMorgan, sealing his return to Wall Street.

When he took over as CEO in 2006 after JPMorgan's William Harrison stepped aside, the bank was No. 3 in the U.S. by assets with about $1.2 trillion. The firm ended 2007 with $1.56 trillion, still in third place. JPMorgan is second in terms of market value, worth $158 billion, behind Charlotte, North Carolina-based Bank of America's $189 billion.

Lazard Link

In securing the Bear Stearns deal, Dimon may have benefited from relationships forged in his deal-making days at Citigroup. Bear Stearns hired investment bank Lazard Ltd. to seek ``strategic alternatives,'' Bear Stearns CEO Alan Schwartz said in a March 14 conference call; Gary Parr, head of Lazard's financial-services practice, has known Dimon since 1983, when he sold an arm of Alleghany Corp. to Dimon and Weill, who were then at American Express Co. Parr, 51, also advised Dimon on selling Bank One to JPMorgan.

Even at $10 per Bear Stearns share, ``at the end of the day, what JPMorgan is getting for the price they're paying will work out for shareholders,'' said Jeffery Harte, an analyst at Sandler O'Neill + Partners LP in Chicago. ``When the dust settles, this will be viewed as a good transaction for JPMorgan.''

To contact the reporter on this story: Elizabeth Hester in New York at ehester@bloomberg.net.

Last Updated: March 25, 2008 17:51 EDT