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 NEW YORK (AP) - Morgan Stanley announced Friday its long-expected plans to spin off its Discover operation, saying it would distribute shares in the fourth-largest debit and credit card network to the investment bank's shareholders. Morgan Stanley had announced Dec. 19, when it released its fourth-quarter results, that it would spin off Discover sometime in the next year. The move comes as rival Visa International plans to go public in 2007, following in the footsteps of Mastercard Inc.'s flotation earlier this year.
Analysts had long expected Morgan Stanley to split off Discover, which came to the company in the 1997 combination with Dean Witter & Co., to focus on its prime investment banking, brokerage and trading operations. And shareholders have urged management to shed Discover because it has been steadily losing ground in an intensely crowded field of larger competitors.
Discover, which recently announced a new version of its cards, called Motiva, has 50 million cardholders, ranking it fourth after Visa, MasterCard and American Express.
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