Morgan Stanley is looking to spin off its Discover credit card business in a deal that could raise as much as $9bn (£6bn) for the Wall Street bank.
The admission that the business was on the block yesterday marks a significant climbdown by Philip Purcell, Morgan Stanley's chief executive, who has resisted calls to whittle down the bank's diverse operations from investors dissatisfied with the group's lacklustre share price.
Discover, the third-biggest credit card business in the US after Visa and Mastercard, was part of the Dean Witter businesswhich Mr Purcell headed when it merged with Morgan Stanley in 1997. Potential buyers could include Barclays, Royal Bank of Scotland, JP Morgan and Capital One.
The move came as the fight between Mr Purcell and a group of eight former Morgan Stanley executives intensified, with the rebels accusing the investment bank of intimidating employees.
The group, led by the former chairman Parker Gilbert and ex-president Robert Scott, appealed directly to Morgan Stanley employees in a letter in The Wall Street Journal. They wrote: "We understand that many of you feel there is an atmosphere of intimidation and fear at the firm, in which you may feel that you cannot express your views without fear of retaliation."
Mr Scott and his colleagues urged Morgan Stanley employees to make their views known on a website they have set up, or through Greenhill & Co, the New York-based advisory firm they have employed. Mr Purcell tried to shore up support in his own letter on Friday. He acknowledged that the bank had been through a "tough week", after he promoted the loyalists Zoe Cruz and Stephen Crawford to be co-presidents, replacing Stephan Newhouse.
The shake-up prompted a series of other high-profile departures, including that of Vikram Pandit, who oversaw sales, trading and investment banking, and John Havens, who was head of equities.
In the letter, quoted by Bloomberg, Mr Purcell said: "I know that it was, in part, because of decisions I made that these men left the firm. But I believe fervently that these decisions are in the best long-term interests of each of you, our clients and our shareholders."Reuse content