Morgan Stanley Approves Discover Spin-Off

With the zeal that some families try to marry off an ugly daughter or a dim son, Morgan Stanley is preparing to spin off its Discover credit-card division.

Discover, long the card of easy punchlines, has had a long struggle in generating growth and loan earnings – this, despite Discover credit-card division being one of the larger issuers in the world.

"The spin-off will unlock considerable value for the shareholders of Morgan Stanley," Chairman and Chief Executive John Mack said in a statement. The securities and credit card businesses can grow more quickly if separated, he said.

Morgan Stanley expects to issue shareholders stock in Discover during the third quarter of next year on a tax-free basis.

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