Mitsubishi UFJ Financial Group Inc has invested $9 billion in Morgan Stanley, giving it a 21% ownership stake in bank holding company. The deal has been struck at a share price of $25.25 per share, as against Morgan Stanley current trading price of around $10 per share.
The Japanese banking giant has revised the terms of the initial deal and will acquire $7.8 billion of perpetual non-cumulative convertible preferred stock with a 10% dividend and a conversion price of $25.25 a share. The initial terms of the deal said that MUFG will acquire $6 billion of perpetual non-cumulative convertible preferred stock with a 10% dividend and a conversion price of $31.25 per share. Revised terms also involve Mitsubishi getting $1.2 billion of non-convertible preferred stock with a 10% dividend.
Another Japanese financial major, Nomura, has acquired the operations of Lehman Brothers in Asia and Europe. Morgan Stanley other surviving peer, Goldman Sachs, had raised $5 billion from Warren Buffet’s Berkshire Hathaway.