Morgan Stanley (MS) Receives Final Regulatory Approval for MSSBH Acquisition (C)
Tweet
Share
E-mailGet Alerts MS Hot Sheet
Price: $86.99 --0%
Overall Analyst Rating:
NEUTRAL (
Down)
Dividend Yield: 1.7%
Revenue Growth %: -0.6%
Overall Analyst Rating:
NEUTRAL (
Down)Dividend Yield: 1.7%
Revenue Growth %: -0.6%
Join SI Premium – FREE
Morgan Stanley (NYSE: MS) has received all regulatory approvals to acquire the remaining 35 percent interest in Morgan Stanley Smith Barney Holdings LLC (MSSBH) from Citigroup Inc. (NYSE: C), fulfilling a key strategic priority. Upon the close of the purchase, Morgan Stanley will own 100 percent of the business, which operates under the name Morgan Stanley Wealth Management.
Morgan Stanley will notify Citigroup that it intends to exercise its right to purchase the remaining interest at a previously established price of $4.7 billion, payable in cash. The closing is expected to take place on or about June 28, 2013. Morgan Stanley will record a negative adjustment to capital (i.e., shareholders’ equity) of approximately $200 million (net of tax) to reflect the difference between the purchase price for the 35 percent redeemable non-controlling interest in MSSBH ($4.725 billion) and its carrying value. This adjustment will negatively impact the calculation of basic and fully diluted earnings per share for the three- and six-month periods ended June 30, 2013.
Additionally, MSSBH will redeem all of the Class A Preferred Interests in MSSBH owned by Citigroup and its affiliates for a purchase price equal to their liquidation preference plus accrued and unpaid distributions, or approximately $2.028 billion in aggregate, simultaneously with Morgan Stanley’s purchase of the remaining interest.
James P. Gorman, Chairman and Chief Executive Officer of Morgan Stanley, said: “This is a historic day for Morgan Stanley. It is the culmination of a multi-year effort to transform our business model into one that offers stronger shareholder returns and greater stability in volatile markets. Immediately upon closing, we expect to start seeing the benefits of 100 percent ownership – including an expanded deposit base, unique syndication and distribution capabilities and enhanced opportunities for both our wealth management and institutional clients.
“Today, the power of Morgan Stanley’s platform – a premier investment bank and one of the world’s preeminent wealth and asset management franchises – is clearer than ever before. With this milestone behind us, we have added momentum to carry out our full plan to achieve higher shareholder returns.”
Morgan Stanley will notify Citigroup that it intends to exercise its right to purchase the remaining interest at a previously established price of $4.7 billion, payable in cash. The closing is expected to take place on or about June 28, 2013. Morgan Stanley will record a negative adjustment to capital (i.e., shareholders’ equity) of approximately $200 million (net of tax) to reflect the difference between the purchase price for the 35 percent redeemable non-controlling interest in MSSBH ($4.725 billion) and its carrying value. This adjustment will negatively impact the calculation of basic and fully diluted earnings per share for the three- and six-month periods ended June 30, 2013.
Additionally, MSSBH will redeem all of the Class A Preferred Interests in MSSBH owned by Citigroup and its affiliates for a purchase price equal to their liquidation preference plus accrued and unpaid distributions, or approximately $2.028 billion in aggregate, simultaneously with Morgan Stanley’s purchase of the remaining interest.
James P. Gorman, Chairman and Chief Executive Officer of Morgan Stanley, said: “This is a historic day for Morgan Stanley. It is the culmination of a multi-year effort to transform our business model into one that offers stronger shareholder returns and greater stability in volatile markets. Immediately upon closing, we expect to start seeing the benefits of 100 percent ownership – including an expanded deposit base, unique syndication and distribution capabilities and enhanced opportunities for both our wealth management and institutional clients.
“Today, the power of Morgan Stanley’s platform – a premier investment bank and one of the world’s preeminent wealth and asset management franchises – is clearer than ever before. With this milestone behind us, we have added momentum to carry out our full plan to achieve higher shareholder returns.”
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Bank of America (BAC) Tops Q1 EPS by $0.07, Beats on Revenue
- Bank of America meets earnings estimates, beats revenue expectations in Q1 2024
- Morgan Stanley Starts Auna SA (AUNA) at Overweight, 'Expanding Access to Quality Private Healthcare in SSLA'
Create E-mail Alert Related Categories
Corporate News, Mergers and AcquisitionsRelated Entities
Citi, Morgan Stanley, EarningsSign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
