Morgan Stanley buying Calgarybased Solium for US$900M.

NEW YORK • Morgan Stanley just announced its biggest acquisition in a decade and agreed to pay the largest premium of any major financial deal this year. It may just be getting started.

The firm, which said it will spend US$900 million for stock-plan administration company Solium Capital Inc., isn’t ruling out acquiring traditional wealthmanagement firms as well as more financial-technology companies, people familiar with the matter said Monday. Future deals might be aimed at adding scale to Morgan Stanley’s US$400 billion asset manager, the people said, asking not to be identified.

Chief executive officer James Gorman is turning to takeovers after mostly focusing since the 2008 financial crisis on improving performance.

“As we’ve said, we’d look to pursue more,” Andy Saperstein, co-head of wealth management at Morgan Stanley, said in an interview. He declined to be more specific.

Morgan Stanley agreed to pay 43 per cent more than Calgary-based Solium’s closing price on Friday because the acquisition is being valued based on what it would be worth when combined with a bank of Morgan Stanley’s size, the people said.

The premium “might raise a brow,” Glenn Schorr, an analyst at Evercore ISI, said in a note to clients. “But we think this makes significant strategic sense.”

Shares of Morgan Stanley fell 1.47 per cent to US$40.21 on Monday in New York, while Solium surged 43 per cent to US$19.11.

The deal is subject to the approval by a two-thirds majority vote by shareholders.