The investment bank JPMorgan Monday raised its takeover bid for Bear Stearns from $2 to $10 a share.

The move comes amidst unrest among Bear shareholders unhappy with the original deal.

Under the renegotiated buyout, JPMorgan will pay nearly $1.2 billion in stock for Bear Stearns rather than the $236 million it originally agreed to.

To short-circuit the takeover Bear Stearns directors have agreed to immediately issue JPMorgan with 95 million new shares which will give it a 39.5% holding.

'We believe the amended terms are fair to all sides and reflect the value and risks of the Bear Stearns franchise,' JPMorgan CEO, Jamie Dimon, said.

The increased bid boosted Wall Street sending all the major indices higher.

JPMorgan faced immense criticism following its original $2 bid, particularly from investors and Bear Stearns staff.

While investors, staff, and Wall Street greeted news of the increased bid enthusiastically, the Federal Reserve, which is underwriting $30 billion of Bears' riskier assets, was weighing up its options. The Fed will need to approve the new deal for it to proceed.