CHICAGO (AP)—A management-led investor group is buying the Montgomery Ward department-store division from Mobil Corp. in a $3.8 billion leveraged buyout that Ward’s president said Monday will give the operation new flexibility.

“I firmly believe that independence will enable us to further run the company as though we owned it—because we will, and the customer will measure our effectiveness,” Montgomery Ward President Bernard Brennan told a news conference.

“Independence gives us much more flexibility.”

Brennan said GE Capital Corp., a unit of General Electric Co., is a substantial investor in the buyout and will take over Ward’s credit card operation.

In a leveraged buyout, investors borrow heavily to buy out a company and then pay off the debt with that company’s cash flow or sale of its assets.

Brennan, who wouldn’t go into details of the new ownership, said the company has no plans to sell other assets or to lay off any employees under the buyout plan, which is to go into effect in 60 days.

“We see no need at this time to reduce employment. For example, in Chicago, we’ve added 300 jobs in the last six months,” Brennan said. “This is not a leverage buyout that says, ‘Let’s shrink the company.'”

New York-based Mobil, which bought Montgomery Ward in 1976, has wanted to sell the chain for some time.

And Brennan, who is credited with turning the retailer around in recent years, had been negotiating for many months to acquire the company.

“It’s a business that we don’t know too well,” said Mobil Chairman Allen E. Murray, adding the oil company believes it would be best to concentrate on its core businesses.

Murray said in a telephone interview Monday that Mobil began receiving inquiries about Montgomery Ward last summer, but declined to identify the other parties interested in buying the retailer.

Mobil stock jumped $1 to $44.58 in trading Monday on the New York Stock Exchange.

“The company should feel good about getting a substantially higher price than Wall Street thought they should get,” said analyst Bruce Lazier, vice president for energy at Prescott, Ball & Turben Inc.

Although Mobil hasn’t said what it would do with the money from the sale, Lazier said he believes capital investment will receive the largest share.

“My guess is that that will reduce their short-term debt and that gives them an extra two billion dollars of funds available, number one, for reinvestment in capital expenditures if the opportunities arise, and number two, gives them flexibility to increase dividends and share repurchase plans,” Lazier said in a telephone interview from New York.

Montgomery Ward, the nation’s eighth-largest retailer, lost money in the early 1980s, but under Brennan was restructured and returned to profitability.

“This is a historic day for Montgomery Ward. We’ve gone through an awful lot over the years,” said Brennan, who joined the company in 1982.

“We’ve had six consecutive quarters of record earnings. In 1987, we earned $130 million after taxes. In 1980, we had a $162 million loss after taxes.”

During its comeback effort, the company laid off 17,000 employees, closed its Jefferson Ward discount stores and other unprofitable branches, and shut down the catalog division that dated back to the company’s early days.

It moved into specialty retailing, opening appliance and electronics stores, and is converting its department stores to emphasize specialty formats including electronics, home furnishings and recreational items.

Last month, Montgomery Ward announced it was realigning its field-office management to create new specialty retailing positions.