The valuation of Morgan Stanley Smith Barney (MSSB) joint venture will be settled on 10 September 2012 by Perella Weinberg, an investment bank hired as the independent arbiter.
Both wealth managers valued their wealth management joint venture in between a range of $9bn-$23bn, and the independent assessment will enable them to reconcile their opinions.
According to the regulatory filings, Morgan Stanley valued the business at $9bn, against a valuation of approximately $22.5bn from Citi, which marks a difference of $11bn.
Under the terms and conditions of the agreement, if there is more than 10% difference in their valuation, they will appoint an independent part, who will assess the value of the joint venture.
As per the terms and conditions laid for the establishment of MSSB, the company will have to issue 90 days notice prior to initiating its call option to give both partners an opportunity to agree on the purchase price.
In May this year, Morgan Stanley announced that it is planning to acquire 14% additional stake in the joint venture MSSB, in which it already owns 51% stake.