Morgan Stanley (MS) said it is divesting its 6.7% stake in investment manager Invesco (IVZ). The investment bank will sell its 30.9 million shares of Invesco. Morgan Stanley announced today that the shares were priced at $21.48, which will result in $664 million of proceeds. Invesco shares closed Tuesday at $23.20. The underwriter, also Morgan Stanley, will then sell the shares over time, either over the counter or through negotiated transactions. Invesco won't receive any proceeds from the offering.
Back in June, Morgan Stanley sold its Van Kampen mutual funds to Invesco for a total of $800 million in cash and those 30.9 million Invesco shares. The sale added $114 billion to Invesco's assets under management, and since then, Invesco shares have rallied about 27%.
"This share sale is part of Morgan Stanley's strategy to reallocate capital into the firm's client-driven, flow businesses," said James Gorman, president and CEO of Morgan Stanley.
The companies will continue to work together, and Morgan Stanley will maintain its distribution arrangement with Invesco for its retail-brokerage unit.
"Invesco has become one of our key global partners across retail, asset management and institutional securities, and we look forward to continuing to work closely together," Gorman added. Shares of Invesco dropped more than 5% in premarket trading.
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