Mitsubishi UFJ to Buy Morgan Stanley Stake

Updated from 9:22 a.m. EDT

Morgan Stanley (MS Quote) shares were up 3% Monday after Japan's Mitsubishi UFJ (MTU Quote) said that it would invest as much as 20% in the ailing investment bank.

In a company statement, Mitsubishi said it would acquire 10% to 20% of Morgan Stanley "as soon as practicable." The statement did not disclose a sale price of the stake, but said the agreement would allow it to appoint one director to Morgan Stanley's board.

Morgan Stanley had been talking with Wachovia (WB Quote) about a possible merger last week, but those talks have since cooled, according to reports.

Cramer: Goldman, Morgan Better Off

Mitsubishi last month scooped up the remaining 35% of UnionBanCal (UB Quote) it didn't already own for $3.5 billion.

Morgan Stanley shares were recently up 79 cents at $28. Earlier the stock had a double-digit gain before pulling back.

Did Morgan Stanley and Goldman Sachs make the right move by becoming bank-holding companies?
	Yes No They each should have found a merger partner instead.