Morgan Stanley emerged as the surprise winner in the closely watched valuation battle surrounding its joint-venture stake in Morgan Stanley Smith Barney, The Post has learned.
Perella Weinberg, a third-party consultant, yesterday submitted a valuation of less than $15 billion, sources close to the situation said — which is closer to Morgan Stanley’s $9 billion valuation of the brokerage than to Citigroup’s $22 billion figure.
The sub-$15 billion valuation is also lower than Morgan Stanley executive were expecting, sources said.
Brass at MS were said to be ready to accept a valuation roughly halfway between the high and low estimates, according to sources — somewhere near $15.5 billion. After receiving the news yesterday, MS executives appeared happy leaving a Midtown meeting related to the matter, sources said.
The exact Perella Weinberg valuation could not be learned at deadline but was expected to be released soon.
Perella was brought in as an independent agent charged with breaking the deadlock between Morgan Stanley and Citigroup in valuing the 17,000-strong retail brokerage business.
Morgan Stanley, which owns 51 percent of the Street’s largest brokerage, is exercising its right to buy an additional 14 percent slice of the business and wants to pay as little as possible.
One source said that he believed the figure reached could be safely estimated at between $10 billion and $15 billion.
For Citigroup, a decidedly lower valuation could mean it may have to raise more capital to cover the difference.
Morgan Stanley is looking to purchase the rest of the brokerage operation over the next two years and has argued that its value has suffered in part due to a weak economy.
Smith Barney was cobbled together during the height of the financial crisis when Citigroup was fending off concerns that it didn’t have sufficient capital to buffer against growing mortgage losses.