NEW YORK (Reuters) - Morgan Stanley (MS.N), which saw its stock
pummeled Wednesday on worries it may not survive the credit crunch,
has held preliminary takeover talks with Wachovia Corp (WB.N), a
person familiar with the situation told Reuters.

Separately, CNBC reported that Morgan Stanley was having deal
discussions with CITIC, the China-controlled conglomerate that owns
brokerage firm CITIC Securities (600030.SS). Morgan executives could
not be reached immediately for comment on these talks.

Morgan Stanley is considering other options, the source said. Other
banks also have expressed interest in a deal, according to media
reports late Wednesday.

Both Wachovia and Morgan Stanley declined to comment on whether it was
having takeover talks.

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