Associates to Buy SPS Credit Card Unit

Associates First Capital Corp., the nation’s largest consumer finance company, agreed to buy SPS Transaction Services Inc., a private-label credit card unit, from Morgan Stanley, Dean Witter, Discover & Co. for $896 million. Dallas-based Associates would buy the assets of SPS, which issues credit cards for companies such as Office Depot Inc. and Tandy Corp.’s Radio Shack, from Morgan Stanley and public shareholders. Public shareholders would get $32 a share; Morgan Stanley would get less because it would be assuming liabilities. The transaction would let Associates, which gets most of its income from consumer loans and credit cards, expand fee revenue that is less dependent on interest-rate changes. The two units Associates plans to buy, SPS Payment Systems Inc. and Hurley State Bank, manage $2.3 billion in credit card receivables. The Discover card business is not part of the transaction. Associates shares rose 25 cents to close at $79.25 in active trading on the NYSE.