May 29 (Bloomberg) -- JPMorgan Chase & Co. won approval of its purchase of Bear Stearns Cos., shuttering an 85-year-old firm whose collapse ranks along with Drexel Burnham Lambert as the biggest in Wall Street history.

Shareholders of Bear Stearns, once the fifth-largest U.S. securities firm, endorsed the acquisition today in a vote at the firm's Madison Avenue headquarters, which will soon house JPMorgan's investment bank, said spokeswoman Tasha Pelio. As of May 9, JPMorgan held 49.5 percent of the $2.3 billion company, Bloomberg data show.

The deal faces lawsuits from shareholders who sought more than the $10 a share JPMorgan agreed to pay in the all-stock deal, and say JPMorgan's stake unfairly skewed the vote. Even so, JPMorgan Chief Executive Officer Jamie Dimon expects the deal to close on May 30.

``It's very sad to see any great old firm fall under the waves,'' said Roy Smith, a finance professor at New York University's Stern School of Business and a former partner at Goldman Sachs Group Inc.

Founded in 1923 by Joseph Bear and Robert Stearns at 100 Broadway in New York, Bear Stearns survived the Great Depression and first sold shares to the public in 1985, under then-CEO Alan ``Ace'' Greenberg. Now, the company's brand name will all but vanish, and 60 percent of Bear Stearns's 14,000 employees are likely to be out of a job.

Venting

Some Bear Stearns employees and shareholders vented their frustration on a portrait placed by an artist outside the building of former CEO James ``Jimmy'' Cayne, who was replaced by Alan Schwartz in January. Comments included: ``Dear Jim Up Yours!,'' ``My Blood is Boiling,'' ``Should we raise more capital?'' and ``Opening Bid: One Dimon.''

Bear Stearns joins a list of vanished Wall Street names that include First Boston, Salomon Brothers, Dillon Read and Donaldson Lufkin & Jenrette. The one remaining Bear Stearns vestige will be its retail brokerage, which will keep the brand and operate as a separate unit in JPMorgan's asset management division, headed by Jes Staley.

Unlike many of those now-defunct firms, Bear Stearns foundered not through an acquisition but because it couldn't manage its own risks. Schwartz said he was aware of how hard that could be.

``We have to make sure our risk management and trading management are working together,'' Schwartz said the same month.

`Not Enough'

Cayne chaired today's meeting, which Schwartz also attended. They didn't take questions, according to Wayne Kaniper, a shareholder from Trenton, New Jersey who said he turned 76 today.

``Cayne offered his apology, but to me that's not enough,'' said Kaniper, who said he bought his Bear Stearns shares about a year ago. The stock fetched as much as $173 in January 2007.

The risk-taking culture that Bear Stearns represented is probably now gone for good, said Charles Geisst, a finance professor at Manhattan College in New York and author of ``100 Years on Wall Street.''

``Hopefully the surviving firms will manage their risks better and won't leave it to individual traders,'' he said. ``As they sink into the sunset, as I suspect they will, that model they embody will as well.''

Exodus

The sale to JPMorgan, announced in March, capped an eight- month slide in the company's fortunes that began last July with the collapse of two Bear Stearns hedge funds that invested in securities linked to subprime mortgages. Those failures caused investors to doubt the value of any asset linked to the mortgage market, Bear Stearns's biggest business.

On March 14, the Federal Reserve agreed to lend money to Bear Stearns through JPMorgan to prevent the collapse of the firm, which faced an exodus of clients and lenders. Facing a potential bankruptcy, CEO Schwartz was forced to accept a $2 a share offer from JPMorgan to buy the company, two days after he told investors that the company's ``liquidity cushion'' was sufficient to weather credit-market losses.

JPMorgan later agreed to raise the price to $10 a share under pressure from Bear Stearns shareholders, many of whom were employees. JPMorgan agreed to take the first $1 billion in losses from the Fed on Bear Stearns's assets and negotiated to buy 39.5 percent of the company to ensure the deal would pass.

Each share of Bear Stearns will be exchanged for 0.21753 of a share of JPMorgan stock. That values the deal at $9.43 a share, based on JPMorgan's closing price of $43.36 yesterday. Shareholders of record as of April 18 were allowed to vote in the special meeting today. JPMorgan added $1.01, or 2.4 percent, to $43.87 as of 11:50 a.m. in New York Stock Exchange trading.

Headquarters

Bear Stearns's profit exceeded $2 billion in 2006, yet the price JPMorgan initially agreed to pay was about one quarter the value of the headquarters building. The 1.2 million-square-foot, 45-story structure built in 2001 is worth about $1.2 billion, based on the average $1,000 per-square-foot that comparable office space in the city is currently fetching.

JPMorgan said at the time the deal was announced that it would add to its businesses, including energy and commodities, with the acquisition. It also gives JPMorgan a prime brokerage, a unit that process trades and provides loans to hedge funds and other institutional clients.

Dimon said May 12 his firm expected $800 million to $1.1 billion in additional earnings by the end of 2009 from its purchase. The majority of the earnings could come from the prime brokerage, a business JPMorgan was eager to acquire, he said.

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

Last Updated: May 29, 2008 11:52 EDT