Visa public offer raises record $17.9 billionMarch 19th, 2008 - 8:20 pm ICT by admin
New York, March 19 (IANS) Despite the general gloom in global equities markets, credit cards major Visa Thursday concluded the largest ever public offering in the US to raise $17.9 billion at $44 a share, above the expected price of $37-$42. The company’s shares will start trading from Wednesday on the New York Stock Exchange under the ticker symbol “V”.
If the San Francisco-based credit card company decides to retain 40.6 million shares based on the over-subscription, in addition to the 406 million on offer, the public issue could raise as much as $19.65 billion, analysts said.
AT&T wireless had raised $10 billion in 2000 - the previous record.
The offering will generate a windfall for thousands of Visa’s member banks that own the company - slightly more than half of the shares are being sold to the public, for which J.P. Morgan and Goldman Sachs are lead underwriters.
Morgan would pocket about $1.1 billion by offering nearly 29 million shares as Visa’s largest-selling shareholder, according to the regulatory filings. Bank of America will sell 14 million shares and Citigroup another 6.8 million.
Visa’s offer comes when stock markets are in turmoil over economic problems in the US, but analysts maintain the business of processing credit cards will be better insulated as people switch to plastic money for transactions.
Shares of Visa’s main rival MasterCard that went public in May 2006 have been good performers since their debut despite turbulent markets. The firm’s stock, priced at $39 a share, is up fivefold and had closed at $210.25 Tuesday.
According to Visa’s prospectus filed with the Securities and Exchange Commission last month, the company recorded 44 billion transactions in 2006, against 23.4 billion by MasterCard.
Consumers worldwide had 1.5 billion Visa-branded cards in their wallets at the end of September last, compared with 916 million MasterCard-branded pieces of plastic at the end of 2007.
Visa investors could see their operating margins double by 2015 as its various units merge and the company becomes a public entity, said Michael Kon, senior analyst with Morningstar Inc, which pegs the worth of share $74.
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