Under the terms of the deal, the distribution of all of the outstanding shares of Discover common stock will be made on June 30, 2007 to Morgan Stanley stockholders of record as of the close of business on June 18, 2007.
Morgan Stanley will distribute one share of Discover common stock for every two shares of Morgan Stanley common stock outstanding on the record date. Stockholders will receive cash in lieu of fractional shares for amounts less than one full Discover share.
Moreover, Morgan Stanley has received a favorable tax ruling to the effect that the distribution will be tax-free to Morgan Stanley stockholders for US federal income tax purposes.
Following the distribution, Discover will be an independent, publicly traded company. Discover’s common stock has been authorized for listing on the New York Stock Exchange.
David Nelms, CEO of Discover, said: Discover will be even better positioned to create long-term value as a standalone company. We have a clear strategy to increase profitability by continuing to grow our card-issuing business and realizing the substantial opportunities in the fast-growing payments business. We believe we are well positioned to build on the success we have achieved as part of Morgan Stanley.
