Morgan Stanley shares fell 40% intraday on October 7 after rumours - subsequently denied - that the bank’s deal to sell a $9bn stake in itself to Mitsubishi UFJ was in trouble. Morgan Stanley said the rumours were untrue and that it had received US, European and Japanese regulatory approvals and is seeing out a five-day mandatory waiting period before closing the deal. The shares closed down 25% at $17.65.

MUFJ agreed to buy $3bn of shares at $25.25 a share, against the closing price on September 26 of $24.75, for a 9.9% stake. The Japanese bank will also buy $6bn of perpetual non-cumulative preferred stock with a 10% dividend and a conversion price of $31.25 a share. Full conversion could give MUFJ a 21% stake in Morgan Stanley.

29 Sep 2008 -

Mitsubishi Stanley

22 Sep 2008 -

Morgan’s trialing transformation