MUFG rejects report to invest in Lehman

By Taro Fuse and Sachi Izumi

TOKYO (Reuters) - Mitsubishi UFJ Financial Group said it has no plans to invest in U.S. investment bank Lehman Brothers rejecting a media report that it may bid for a stake.

The Times of London said Japan's largest bank was ready to bid for a "substantial stake" in the subprime-hit Wall Street firm, and may "seek control" of Lehman, sending shares of the U.S. bank higher in after-hours trade.

The Times, citing "senior sources" close to Mitsubishi UFJ, said the bid could come after Lehman's quarterly earnings results next week.

However a spokesman for Mitsubishi UFJ, who declined to be identified, told Reuters the report was not true.

Separately, an executive at the Japanese bank said it had "absolutely no plans" to invest in Lehman. The executive spoke on condition of anonymity.

Lehman Brothers declined to comment on the report.

Shares of the Wall Street firm rose 1.6 percent in extended trade. They had risen 5 percent in regular trade on a separate report that HSBC Holdings is among potential buyers for the bank.

Shares of Mitsubishi UFJ finished the morning down 1.2 percent at 807 yen, slightly outperforming Tokyo's bank index, which fell 1.5 percent.