Business & Finance
Discover Financial Services, the credit card arm of banking giant Morgan Stanley, will not be spun off after all, the latter's new chief executive said. But he said the bank's aircraft-leasing unit, AWAS, will be sold because it is not central to the company's strategy. John Mack, who has headed Morgan Stanley since predecessor Philip Purcell resigned under pressure June 30, told employees, "The board and I are convinced that Discover is not only a strong business, but also an attractive asset." Under Purcell, the investment bank announced in April that it was pursuing a spinoff of Discover.
Google Inc., the Internet's leading search engine, informed the Securities and Exchange Commission that it proposes to sell 14.2 million shares of stock worth about $4.2 billion. The announcement came on Google's first anniversary as a publicly traded company. Some of the proceeds may be spent on acquisitions of "complimentary businesses, technologies, or other assets," the filing said.
Merrill Lynch & Co. and two other investors will buy a 10 percent stake in the Bank of China for $3.1 billion, reports said. The consortium is led by Royal Bank of Scotland, which will gain a seat on the board of China's second-largest financial institution. The deal is the third of its type in a little over a year. Earlier, London financial services giant HSBC bought 20 percent of China's fifth-largest lender, the Bank of Communications, for $1.7 billion, and two months ago Bank of America said it would pay $3 billion for a 9 percent stake in China Construction Bank.
Tommy Hilfiger Corp. officials were unavailable for comment on a Wall Street Journal report that their company has decided to put itself up for auction. Citing "two people familiar with the matter," the Journal said the men's fashion house is prepared to consider offers from private equity firms as well as rivals in its industry, which has been consolidating in recent years. The Hong Kong company reportedly is debt-free. Its net worth is valued at $1.5 billion.