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Monday, September 29, 2008

Mitsubishi UFJ to Pay $9B for 21% Stake in Morgan Stanley

By Ken Sweet

FOXBusiness

Japanese banking giant Mitsubishi UFJ said Monday it will invest $9 billion into Morgan Stanley (MS) for a 21% stake in the company.

As part of deal, Mitsubishi will get a 9.9% stake in Morgan’s common stock at $25.25 a share, and $6 billion in convertible preferred stock for a conversion price of $31.25 in a share. The preferred stock will also carry a 10% dividend.

Mitsubishi will now be the largest stakeholder in Morgan Stanley, the companies said.

The deal between Morgan and Mitsubishi had been announced last week, but no money had changed hands and no percentage ownership had been defined. Morgan said it planned to use the capital raised by selling a stake to Mitsubishi to boslter its books as the company makes the transition from an investment bank to a bank holding company.

Shares of Morgan Stanley were down 4% in early market trading.

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