Russian roulette at Morgan Stanley?

Pricing deals in current markets is like playing Russian roulette, and Mitsubishi UFJ Financial Group knows this to its cost, notes Lex. Last Friday, under its original deal to invest $9bn in Morgan Stanley for a 21% per cent stake, MUFG could have bought nearly the entire US bank (excluding a control premium). Now MUFG will plough $7.8bn into preferred stock, which will convert into common stock at $25.25 - lower than the $31.25 initially agreed but well ahead of Friday’s $14.22 share price. The residual $1.2bn will, meanwhile, take the form of perpetual non-converting preference stock; in essence a permanent loan. This seems a fair... [read full story]