AP
Visa Hopes to Raise $10B in IPO
Friday November 9, 6:49 pm ET
By Kristen A. Lee, AP Business Writer
Visa's Takes Step Toward Initial Public Offering; Hopes to Raise $10B


NEW YORK (AP) -- Visa, the biggest U.S. credit card network, said in a regulatory filing on Friday that it hopes to raise $10 billion in an initial public offering.
Visa said it plans to deposit a portion of the company's proceeds from the IPO into an escrow account to pay settlements or judgments related to litigation settlements.

On Wednesday, Visa disclosed that it will pay American Express Co. up to $2.07 billion to settle a lawsuit alleging the company illegally stifled competition. Under the plan, Visa said its member banks will absorb the costs of the settlement.

Despite a turbulent week on Wall Street, which ended with major drop on Friday, Visa's IPO is hotly anticipated by investors. Visa is following in the footsteps of rival MasterCard, which has more than quadrupled since the company went public in May at $39 a share.

As Wall Street struggles, MasterCard and Visa have secured the enviable role of processing the world's credit card payments but taking on none of the debt. The risk is instead held by the 25,000 banks in more than 200 countries that issue the cards.

On Oct 31, MasterCard Inc. reported that third-quarter profit jumped 63 percent, far exceeding Wall Street's expectations and driving shares to an all-time high.

Visa posted net income of $771 million on operating revenue of $3.73 billion for the nine months ended June 30, according to the Securities and Exchange Commission filing.

Visa did not disclose the number or expected price range of the shares it plans to offer. The company noted that the total offering price was estimated solely to calculate its registration fee and may change.

Visa also did not indicate whether any stockholders will sell shares in the IPO. The company listed JPMorgan Chase as its largest stockholder, with 23.3 percent of its Class B shares. According to the filing, Bank of America Corp. owns 11.5 percent of Visa's Class B stock and National City Corp. owns 8 percent of Class B shares.

JP Morgan Securities, Goldman Sachs, Banc of America Securities, Citigroup Global Markets, HSBC Securities, Merrill Lynch, UBS Securities and Wachovia Capital Markets are serving as the IPO's lead underwriters.

Visa made the disclosure in an S-1 filing with the SEC. Previously, Visa released the restructuring steps it would take to prepare for its IPO in S-4 filings.

The San Francisco-based company did not identify a proposed stock exchange or stock symbol in the filing.