MUFG buys 21 percent stake in Morgan Stanley

By Joseph A. Giannone NEW YORK (Reuters) - Mitsubishi UFJ Financial Group Inc (MUFG) said on Monday it bought a stake in beaten-down Morgan Stanley, though at more favorable terms, as the U.S. government reportedly offered to support the Japanese bank's investment. Mitsubishi UFJ, Japan's largest bank, purchased a 21 percent stake in Morgan Stanley for $9 billion in cash, but amended the terms of a September 29 agreement so that the entire stake is in preferred stock. Previously $3 billion of the stake was to be in common stock purchased for $31.25 a share, but Mitsubishi pushed for new terms after Morgan's stock plunged 58 percent last week and eroded its total market value to just $10.3 billion. In early electronic trading, Morgan's stock rose more than 28 percent to $12.42 a share. About $7.8... [read full story]