Joe Lewis, the reclusive billionaire owner of Tottenham Hotspur Football Club, who bought 7 per cent of Bear Stearns three months ago, has increased his stake in the struggling Wall Street bank to 8 per cent, despite losing about $100 million (£49 million) on his investment so far.

Mr Lewis, 70, who is London-born but works from the Bahamas, snapped up about $860 million of Bear Stearns shares in September, making him one of the bank’s largest shareholders. However, Bear Stearns’s share price, already well down on last year’s price when Mr Lewis made his initial investment, has continued to fall, leaving him with a paper loss of about $100 million.

The shares were badly hit over the summer as two Bear Stearns hedge funds collapsed under the weight of losses on bonds backed by high-risk “sub-prime” bonds. They have continued to fall since, as further sub-prime losses have come to light and an article in The Wall Street Journal characterised James Cayne, the chief executive, as an occasional user of marijuana. Mr Cayne refuted the claims made in the article.

Mr Lewis appears to believe that the shares are likely to rebound after falling by 40 per cent this year.

He has spent about $120 million in recent weeks on acquiring an additional 1 per cent stake in the bank, according to a regulatory filing covering the period until December 5.

Mr Lewis operates mainly through his Tavistock investment vehicle, which owns more than 100 business ventures, including golf course developments in Florida, and once held a 30 per cent stake in the Christie’s auction house. He is ranked Britain’s sixteenth-wealthiest person, with an estimated worth of £2.8 billion, according to The Sunday Times Rich List.

Analysts said that Mr Lewis could be betting that Bear Stearns’s shares will pick up when the worst of the fall-out from America’s mortgage meltdown, and the resulting credit crunch, is over and the banking industry returns to normal. Alternatively, they say, he may be hoping that Bear Stearns’s low share price makes the bank vulnerable to a takeover at a significant premium to its present market capitalisation.

Mr Lewis’s investment came to light as Jamie Dimon, the chief executive of JPMorgan, said that he foresaw “a huge amount of big [banking] mergers in the US and Germany” in the wake of multibillion losses on mortgage-backed securities.

“Companies recognise after such a collapse that they need more weight, more capital and access to good, long-term financing and the people there say to themselves: ‘Now it is time to do something,’ ” Mr Dimon told the Börsen-Zeitungbusiness newspaper in Germany. “That normally comes after a crisis. During the crisis, they are very busy.”

Mr Lewis is by no means the only investor to have lost heavily on a recent acquisition of banking shares. In the three months since Bank of America invested $2 billion in Countrywide Financial, the largest mortgage lender in the United States, the stake is thought to have lost about half its value as the group continued to reel from the mortgage meltdown.

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