Mitsubishi UFJ buys 21% stake in Morgan Stanley

NEW YORK (Reuters) — Mitsubishi UFJ Financial Group said Monday it bought a stake in beaten-down Morgan Stanley (MS), 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% stake in Morgan Stanley for $9 billion in cash, but amended the terms of a Sept. 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% last week and eroded its total market value to just $10.3 billion. In early electronic trading, Morgan's stock soared. As part of the revised deal, Mitsubishi will receive $7.8 billion in convertible preferred stock that carries a 10% dividend... [read full story]