James Cayne, the chairman of Bear Stearns, is trying to elicit a counter- offer for the stricken investment bank in a move that could lead to him being sued for breach of contract.

Mr Cayne and Joe Lewis, the Tottenham Hotspur investor with 12.1 million shares in Bear Stearns — an 8.35 per cent stake — are seking a white-knight bidder to top the $276 million (£139 million) offer from JPMorgan Chase. They hope that even if a counter-offer is unsuccessful, it could force Jamie Dimon, chief executive of JPMorgan Chase, to raise his bid.

Last night, in a regulatory filing, Mr Lewis confirmed that he may encourage Bear to consider strategic alternatives to the JPMorgan Chase offer to “protect the value” of his investment.

Bear shares rose 4 per cent after the market had closed yesterday to $5.47.

However, according to the terms of the tabled takeover agreement, no officer, director or employee is allowed to encourage an alternative transaction. Both Mr Cayne and Mr Lewis have lost more than $1 billion each after the near-collapse of Bear Stearns at the weekend.

Bear Stearns did not return calls yesterday.

It is thought that Mr Cayne and Mr Lewis have contacted a number of banks and private equity firms, including Kohlberg Kravis Roberts and JC Flowers. They are also thought to have been in touch with Barclays, HSBC and Royal Bank of Scotland. All three declined to comment.

A counter-offer for Bear Stearns would face a series of hurdles. Part of the JPMorgan Chase offer, which values Bear at $2 a share, includes the financial support of the Federal Reserve Bank of New York, which has underwritten $30 billion of the most toxic of Bear Stearns’s investments. The New York Fed also extended special financing to JPMorgan to cover the cost of Bear Stearns redundancies and impending litigation. Any new bidder would have to convince the central bank that it should transfer its underwriting to support a new offer.

The existing takeover agreement also includes a clause that prevents Bear Stearns from accepting another deal until the JPMorgan Chase offer expires in March next year. In addition, Mr Dimon has an agreement that, should his offer be unsuccessful and a better offer emerge, he still has an option to buy the Bear Stearns headquarters, which are thought to be worth $1.1 billion.

One financier at a US investment bank, said: “If I were looking at a $2 offer, I would try to drum up another bid, but they have little chance.”

However, the JPMorgan Chase offer, although recommended by the Bear Stearns board and approved by the Fed, must be voted on by Bear shareholders. Between them, Mr Cayne and Mr Lewis have a stake of 15 per cent and Bear employees own about 30 per cent of the stock.

Although many employees may seek to block the offer, they will be mindful that, if the bank filed for bankruptcy, they would all lose their jobs. It is believed that JPMorgan Chase plans to make half of the Bear Stearns workforce redundant.

— Merrill Lynch became the first known investor to sue a securities underwriter, claiming that Security Capital Assurance was attempting to avoid meeting claims on $3.1 billion of souring bonds. Security Capital declined to comment.

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