Morgan Stanley Smith Barney is likely to be valued at about $15 billion today when a consultant’s report is finalized, The Post has learned.
That figure — determined by consultant Perella Weinberg — lies at about the midpoint between two competing values set by Citigroup and Morgan Stanley, the joint venture’s owners.
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. It valued the joint venture at $9 billion.
Citi, which is looking for top dollar, valued Smith Barney at $22 billion.
Perella Weinberg was brought in to try to end what has become a sideshow on Wall Street.
“We think they’ll probably ultimately just split it down the middle,” said one source.
Morgan Stanley, which is looking to purchase the rest of the company over the next two years, has argued that the value of the brokerage business has suffered in part due to a weak economy.
Smith Barney was cobbled together during the height of the financial crisis when Citi was on the brink of extinction and scrambling to add more capital to its balance sheet.
Morgan Stanley higher-ups have been griping that they have had a tough time integrating its sales force with Citi’s over the past three years, sources said.
Complicating Morgan Stanley’s valuation is that Chief Executive James Gorman has hitched much of the long-term success of the entire company on making the 17,000-strong brokerage business work.
Gorman placed Greg Fleming — like Gorman, a Merrill Lynch alum — in charge of integrating the brokerage platform, which has struggling mightily to generate significant profit margins.