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MUFG, China fund buying big Morgan Stanley stakes
Published on: 2009-06-03
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TOKYO (MarketWatch) -- Morgan Stanley said Tuesday it is selling Japanese banking giant Mitsubishi UFJ Financial Group Inc. and Chinese sovereign wealth fund China Investment Corp. some 60 million shares in a newly announced public offering meant to raise money for repaying funds to the U.S. government.

The U.S. banking group priced the offering at $27.44 a share, a discount against its Tuesday U.S. closing price of $30.09. Shares in Morgan Stanley later slipped to $29.85 in after hours trading.

MUFG confirmed the deal Wednesday, saying it will buy about 16 million of the common shares on offer for about $440 million.

The stock deal is expected to close on June 15.

As a result of the transactions, MUFG said it will hold more than 20% of Morgan Stanley's common stock.

Meanwhile, China Investment Corp. has agreed to buy 44.7 million shares of the U.S. bank.

The Morgan Stanley public offering is expected to bring in $2.2 billion in exchange for 80.2 million shares of common stock.

When Morgan Stanley completes the capital raising, it expects that it will have satisfied criteria for exiting the U.S. Treasury's Troubled Asset Relief Program by redeeming the government's preferred-share stake in the company.

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