Visa announced details of its impending stock sale, and it’s a doozie: Even at the low end of its projected price, it would by far become the largest initial public offering in U.S. history.
An impending stock sale from Visa could amount to the largest initial public offering in U.S. history.
The credit-card network giant announced the proposed terms of its long-anticipated IPO on Feb. 25, 2008, saying it intends to sell up to $17 billion in stock. Visa said it plans to sell 406 million shares, priced between $37 and $42 a share. An additional 40.6 million shares will be available for purchase by underwriters to cover any excess demand. The offering is scheduled to begin trading on March 19, according to multiple published reports.
Even if its shares price at the low end of its estimated range, Visa’s IPO would far surpass the $10.6 billion AT&T Wireless raised when its stock debuted in 2000.
“Visa operates the world’s largest retail electronic payments network and manages the world’s most recognized global financial services brand,” the company said in its prospectus filed with the Securities and Exchange Commission. “Based on the size of our network, the strength of the Visa brand and the breadth and depth of our products and services, we believe we are the leading electronic payments company in the world.” Visa’s transactions by both number and dollar amount exceeded those of rivals MasterCard and American Express in 2006.
While credit card issuing banks have been impacted by consumer credit woes, as a card processor, Visa’s revenues are tied to the use of plastic payments, which continue to gain ground against more traditional payment methods involving cash and checks.
Visa plans to follow in the footsteps of rival MasterCard in going public. MasterCard raised $2.39 billion in May 2006 with its IPO, and its stock has surged in value since that time. Meanwhile, credit card issuer Discover Financial Services went public with its stock in July 2007.
In June 2007, Visa had outlined its “restructuring” plan to establish a new corporation known as Visa Inc. via mergers involving Visa USA, Visa Canada and Visa International.
Visa said it has applied to list its shares on the New York Stock Exchange under the symbol “V.”