Visa to push ahead with IPO

Visa, the world’s largest credit card network, plans to push ahead with an $18.8 billion (£9.5 billion) initial public offering (IPO), which is set to be the largest in US history.

In a filing with the US Securities and Exchange Commission, Visa proposes to sell 406 million Class A shares at between $37 and $42 each which would generate proceeds of between $15 billion and $17.1 billion.

The San-Francisco based company said that it may sell a further 40.6 million shares to meet demand, expanding the potential size of the IPO to $18.8 billion. The record for the largest US float is $10.6 billion in 2000 by telecommunications company AT&T.

The company said that it plans to set aside $3 billion of net proceeds to cover litigation faced by the company, including allegations of price-fixing between Visa and other card networks.

It also plans to use $10.2 billion of net proceeds to redeem other shares and plans to pay a quarterly dividend of 10.5 cents a share.

Visa will use some of the proceeds from the IPO to settle lawsuits, including one with American Express. With the remainder of the money, the company will buy stock from Visa’s member companies and run the business.

Fifteen banks are arranging Visa’s share sale, including Bank of America Corp, Citigroup Inc, Goldman Sachs Group Inc and JPMorgan Chase & Co.,

Visa is bucking the trend as many companies are scrapping plans to float due to the ongoing market turmoil.

Story link: Visa to push ahead with IPO