Morgan and UFJ revise alliance
(15 October 2008 – Global) Morgan Stanley and Mitsubishi UFJ, after recently announcing an alliance, have confirmed an increased 21 percent ownership of Morgan Stanley for the Japanese bank.
As part of the previously announced global strategic alliance, Mitsubishi UFJ Financial Group (MUFG) has closed on a US$9 billion equity investment in Morgan Stanley that gives MUFG a 21 percent ownership interest.
While initial reports suggested that the investment in Morgan Stanley could eventually reach 20 percent of Morgan Stanley’s equity, new reports signal a greater investment.
Under the revised terms of the transaction, MUFG will receive a greater share as well as the benefit of preference shares.
MUFG has acquired US$7.8 billion of convertible preferred stock with a 10 percent dividend and a conversion price of $25.25 per share as well as and $1.2 billion of non-convertible preferred stock with a 10 percent dividend.
The initial deal was based on three billion dollars of common and six billion of preferred stock.
On the announcement Morgan Stanley chief executive John Mack said that the investment further bolsters their strong capital position and, together with the strategic alliance, will accelerate the transition under Morgan Stanley’s new bank holding company structure.
MUFG chief executive Nobuo Kuroyanagi said that despite a very challenging environment, MUFG and Morgan Stanley have demonstrated their mutual commitment to the strategic alliance by revising the terms of the investment.
While initial reports suggested that the investment in Morgan Stanley could eventually reach 20 percent of Morgan Stanley’s equity, new reports signal a greater investment.
Under the revised terms of the transaction, MUFG will receive a greater share as well as the benefit of preference shares.
MUFG has acquired US$7.8 billion of convertible preferred stock with a 10 percent dividend and a conversion price of $25.25 per share as well as and $1.2 billion of non-convertible preferred stock with a 10 percent dividend.
The initial deal was based on three billion dollars of common and six billion of preferred stock.
On the announcement Morgan Stanley chief executive John Mack said that the investment further bolsters their strong capital position and, together with the strategic alliance, will accelerate the transition under Morgan Stanley’s new bank holding company structure.
MUFG chief executive Nobuo Kuroyanagi said that despite a very challenging environment, MUFG and Morgan Stanley have demonstrated their mutual commitment to the strategic alliance by revising the terms of the investment.
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