15 April 2005
Morgan Stanley's Discover credit card unit is reportedly subject to potential acquisition interest from a number of British banks including HSBC, Royal Bank of Scotland and Barclays.
Morgan Stanley announced last week that it planned to give its investors shares in Discover, which would create a separate company that analysts have valued at more than $10 billion.
Reuters has since reported that the UK trio are all looking into the opportunity.
"It's an invitation to people like HSBC, Barclays and Royal Bank of Scotland to take a look at the business," said an investment banking source. "The question is not if but when they approach Morgan Stanley."
"Would they (the British banks) strategically be interested? Absolutely," added Keefe Bruyette & Woods banking analyst Mark Thomas.
"Royal Bank, Barclays and HSBC are all very active in card issuance and merchant acquisition, and Discover has got both sides of the business."
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