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 NEW YORK (AP) - Morgan Stanley Inc., the second-biggest investment house on Wall Street, said Tuesday it will shed its Discover credit-card business in a bid to pump up shareholder value.
Speculation has swirled for years that Morgan Stanley would split off the No. 4 credit-card brand to focus on its prime investment banking, brokerage and trading operations. Shareholders have urged Morgan Stanley to revive plans to carve out Discover because it's been steadily losing ground in a crowded field of larger competitors.
Morgan Stanley — which also reported Tuesday that its full-year profit rose 51 percent to $7.45 billion in 2006 — said it will spin off Discover sometime next year. The transaction will be as a 100 percent tax-free dividend to shareholders, with no ongoing ownership retained by Morgan Stanley. The company said Discover has about $5.2 billion in equity.
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