Former Morgan Stanley Execs Seek To Split Firm

[Scubawarrior]

NEW YORK - In the headlines this afternoon, a group of former Morgan Stanley executives and dissident shareholders wants to split up the Wall Street firm.

In a letter to shareholders, the group outlined a plan that would reverse Morgan Stanley's (nyse: MWD - news - people ) 1997 merger with Dean Witter. The plan calls for a spinoff of the institutional securities division, which would be led by six former Morgan Stanley executives. Chief Executive Phillip Purcell, meanwhile, will head Dean Witter/Discover, with its retail brokerage, money management and Discover credit-card businesses. The firm is already planning a spinoff of the Discover card business into a separate company.

U.S. stocks were mixed at midday, as April's strong retail-sales report offset Wal-Mart Stores' (nyse: WMT - news - people ) disappointing earnings results.

In more economic data, the number of Americans filing for initial jobless benefits last week rose unexpectedly by 4,000 to 340,000.

In company news, shares of Ameritrade Holding (nasdaq: AMTD - news - people ) slipped after the company said it is not for sale, essentially rejecting a takeover offer from E-Trade Financial (nyse: ET - news - people ).

In merger news, 3M (nyse: MMM - news - people ) is buying filtration products maker Cuno (nasdaq: CUNO - news - people ) for $1.35 billion in cash and assumed debt. The deal will expand 3M's reach in the liquid- and gas-filtration market.

Sabre Holdings (nyse: TSG - news - people ), which owns travel Web site Travelocity, is buying travel booking site Lastminute.com for about $1.1 billion. Analysts say the move is the latest in the consolidation of the online travel business. IAC/InterActiveCorp (nasdaq: IACI - news - people ) owns Expedia.com. Cendant (nyse: CD - news - people ) bought Ebookers last year for $404 million, and Yahoo! (nasdasq: YHOO - news - people ) paid about $574 million for Kelkoo, a price comparison-shopping site that books travel tickets.