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MSCI says may split off proxy adviser ISS

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(Globalpost/GlobalPost)

(Reuters) - Stock market index provider MSCI Inc said on Thursday it was exploring strategic options for its influential proxy advisory unit, Institutional Shareholder Services Inc (ISS), that may lead to a separation of the business.

ISS's revenue fell 1.4 percent to $29.6 million in third quarter, MSCI said. Overall revenue rose 9.7 percent.

ISS accounted for just over 11 percent of the MSCI's total revenue of $258.2 million in the latest quarter.

"Over the past three years, MSCI has worked hard to return that business to a growth track," MSCI Chairman and Chief Executive Henry Fernandez said in a statement. "We believe the time is right to explore our strategic alternatives."

Morgan Stanley is MSCI's financial adviser and Davis Polk is legal adviser.

In a separate statement, ISS said it expected its current management team to remain in place.

MSCI reported a 14.6 percent rise in net income to $55.3 million, or 46 cents per share, for the three months to September 30. On adjusted basis, the company earned 53 cents per share, matching the average market estimate.

MSCI shares have risen nearly 33 percent since the beginning of the year. They closed at $41.21 on the New York Stock Exchange on Wednesday.

(Reporting By Neha Dimri in Bangalore; Editing by Saumyadeb Chakrabarty and Ted Kerr)

http://www.globalpost.com/dispatch/news/thomson-reuters/131031/msci-says-may-split-proxy-adviser-iss