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Morgan Stanley Investment To Be Protected
Monday, 13-Oct-2008 7:05PM United Press International
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NEW YORK, Oct. 13 (UPI) -- Morgan Stanley says it has closed a deal for Japan's Mitsubishi UFJ, the world's second largest bank, to acquire 21 percent of the U.S. financial firm.

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The value of an initial deal -- about $9 billion -- remained intact, but the terms changed after Morgan Stanley stock fell 59 percent last week, The New York Times reported Monday.

Misubishi is paying a lower price per share, $25.25 as opposed to $31.25, and buying only preferred stock, the Times said. In a year, half of the convertible portion of the preferred stock will convert to common stock when Morgan Stanley stock values meet certain conditions, the Times reported.

As part of the deal, which emerged during weekend talks, the U.S Treasury Department would protect the Japanese bank's investment in the Wall Street firm, the report said quoting people involved in the talks.

Such a step is important to the U.S. government's effort to attract outside investors to revitalize the financial system, even as it thinks of acquiring ownership in banks, the newspaper reported.

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