The next step for
could involve the sale of the Wall Street firm's Discover credit card business.
Morgan Stanley's board over the weekend authorized efforts to sell the unit,
Dow Jones News Service
reported on Monday. The news agency reported that the board expects the card business to fetch between $8 billion and $9 billion.
The sale of the Discover business has been one of the demands of a group of former Morgan Stanley investment bankers who have been engaged in a war of words with the firm's CEO Phil Purcell.
The potential sale price for the Discover business is less than what some brokerage analysts were predicting. Last Friday, Fox-Pitt Kelton brokerage analyst David Trone put the value of the Discover business at $14 billion. Trone said a sale of the credit business was one of the likely outcomes of the highly public battle between Purcell and the former Morgan Stanley alumni.
A Morgan Stanley spokeswoman declined to comment.
Shares of Morgan Stanley jumped on the news of a possible Discover sale, rising $2.43, or 4%, to $59.30. The firm's stock, which underperformed the rest of the brokerage sector last year, is up more than 10% since the former investment bankers went public with their discontent over Purcell's stewardship.
Purcell has been reluctant to sell the Discover business, which was one of the key divisions of the former Dean Witter.
The spat between Purcell and the former Morgan Stanley bankers stems from lingering bitterness of the 1997 merger of Dean Witter and Morgan Stanley. The brokerage merger never sat well with many of Morgan Stanley's old guard, who always have looked down on Purcell and the Dean Witter crowd, which was once owned by Sears. It is that persistent culture clash that's fueling the current feud.