International Law

China Investment Corp. Offers to Raise Stake in Morgan Stanley to 49%

Bloomberg TV has just announced Morgan Stanley refused CIC's offer to raise its stake in the bank to 49% from 10%, preferring to remain "independent." More on this as the day goes by.

[Update: 10.14am EST -- Bloomberg. This article maintains that talks continue, in contradiction to the report on Bloomberg TV.].

[10.18 am -- Bank of China has just announced in Paris (for this event) that it is not in talks and will not buy a foreign bank. No text available at this time.]

[10.22 am -- Report: "Morgan CEO John Mack told Citigroup chief Vikram Pandit that "'we need a merger partner or we're not going to make it.'"

[10.26 am -- China Investment Corp. thruogh Central Huijin Investment Co to buy stakes in major Chinese banks to support the financial sector.]

[10.34 am -- Bloomberg TV reports that CIC / Morgan talks are still in process. The substance of the issue: CIC's offer will substantially dilute equity. A purchase by Wachovia will pair the Morgan with an entity that doesn't offer the stability of a Bank of America.]

Comment: Morgan Stanley's independence in China will be severely constrained if the Chinese government controls such a substantial stake.

Full post as published by Asia Business Intelligence on September 18, 2008 (boomark / email).