Mitsubishi UFJ offers to buy 11 pct of Kim Eng

SINGAPORE, Feb 22 (Reuters) - Mitsubishi UFJ Securities Co (8306.T: Quote, Profile, Research) offered on Friday to buy 11 percent of Singapore's Kim Eng Holdings (KEHS.SI: Quote, Profile, Research) from existing shareholders in a bid that could cost the Japanese firm S$166 million ($118 million).

Mitsubishi UFJ said that it will pay S$2.70 per Kim Eng share, representing a premium of 34 percent over the Singapore stockbroker's last traded price of S$2.02 a share.

Morgan Stanley Asia is advising the Japanese firm.

The bid by Mitsubishi UFJ comes one day after the two firms agreed to set up an asset management joint venture as part of a broad cooperation agreement.

The joint venture will set up funds to invest mainly in Asian equities, with Mitsubishi UFJ committing to distribute no less than S$1 billion worth of funds to Japanese investors within the next two years.

Kim Eng and Mitsubishi UFJ will also provide each other with full access to their equity research and execution capabilities, the two firms added.

Mitsubishi UFJ, the securities arm of Japan's largest financial services group, and Kim Eng, whose shareholders include Taiwan's Yuanta (2885.TW: Quote, Profile, Research), signed a memorandum of understanding to set up a funds joint venture in November. ($1=1.410 Singapore Dollar)

(Reporting by Kevin Lim, editing by Jacqueline Wong)