Morgan Stanley is interested in buying all of Citigroup Inc's stake in their wealth management joint venture this year in what could be a roughly $10 billion deal, said people familiar with Morgan Stanley management's thinking. Under the terms of the Morgan Stanley Smith Barney joint venture, Morgan Stanley will get an option starting May 31 to buy 14 percent more of the business from Citigroup, adding to the 51 percent stake it already has.
It has options to buy the remaining portion in two more chunks through May 2014. But both sides are beginning to suggest they would be interested in doing a deal for Citigroup's entire 49 percent stake now instead of waiting for two more years, and have started behind-the-scenes posturing to negotiate. Morgan Stanley and Citigroup spokespersons declined to comment on the potential for an accelerated deal.
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