Morgan Stanley in Japanese take-private

The investment bank’s Asian private equity arm has agreed a ¥15.5bn take private, the first Japanese deal from its latest fund. At the same time the bank is reportedly seeking more investment from CIC.

Morgan Stanley Private Equity Asia has agreed the maiden Japanese investment from its third Asian fund, tending an offer to take Osaka-listed clothing company Ten-Arrows private in a management buyout. The offer has been agreed by the Ten-Arrows board of directors.

MSPEA already has a toe-hold investment of 27.8 percent of the company’s share capital, and if the ¥800 per share offer is successful, it will vacuum up the remaining shares for a consideration of ¥11.2 billion (€73 million; $104 million).

The transaction values Ten-Arrows at around ¥15.5 billion.

Katsuya Hayashi, a member of the company’s founding family and the incumbent chief executive officer, will remain at the business’ helm following the transaction. MSPEA’s statement said the buyout would allow “swift and fundamental business reforms.”

MSPEA closed its third Asia fund in October last year in 2007 on $1.5 billion.

The deal comes as Morgan Stanley is reportedly in talks with sovereign wealth fund China Investment Corporation, which already owns 9.9 percent of the US investment banking group, to raise its stake to as high as 49 percent. Morgan Stanley has not responded to the speculation.

An increased stake could, however, be subject to US Government foreign investment review, a spokesman for CIC told news agency Reuters.