The transaction entails MUFG acquiring 9.9% of Morgan Stanley's common
stock at a price of $25.25 per share, for a total of $3 billion. The
remaining $6 billion buys MUFG perpetual noncumulative convertible
preferred stock that carries a 10% dividend and a conversion price of
$31.25 per share. MUFG will also get a seat on Morgan Stanley's board
of directors. After one year, half of the preferred stock automatically
converts into common stock when Morgan Stanley's stock trades above
150% of the conversion price, and the other half converts on the same
basis after year two.
MUFG and Morgan Stanley also agreed to pursue a global strategic
alliance focusing on corporate and investment banking, retail banking
and asset management.
Shares of Morgan Stanley remained in the red on the news, trading down about 7% to $23.00 in the late morning. -
George White
See Morgan Stanley press release
See Crisis on Wall Street Dealwatch
Morgan Stanley spelled out the details of a definitive agreement for a $9 billion investment from Japanese bank Mitsubishi UFJ Financial Group Monday morning as its tries to stop the bleeding and shore up confidence in the bank. The deal will give MUFG a 21% stake in Morgan Stanley, higher than most previous estimates had predicted.
