Credit card operator Visa eyes IPO
Last Updated: Wednesday, October 11, 2006 | 8:11 AM ET
The Associated Press
Visa, operator of the world's largest consumer credit card payment system, said Wednesday it will restructure its organization to create a new public company called Visa Inc., which will be owned by Visa members.
Visa said the restructuring will improve organizational efficiency, address certain legal claims that exist in some markets and increase access to capital.
Visa Inc. will be created through a series of mergers involving Visa Canada, Visa USA and Visa International, which includes the regions of Asia Pacific, Latin America and the Caribbean, and Central and Eastern Europe, Middle East and Africa.
Visa Europe will remain a membership association, owned and governed by its European member banks, and become a licensee of Visa Inc.
After the mergers are complete, Visa said it will begin the IPO process and list its shares on a major stock exchange. It expects most of the shares in the reorganized company will be sold to the public.
The boards of Visa's six regions and Visa International have unanimously approved the plans, which are now subject to approval by Visa members and regulatory authorities.
Visa Europe will be a minority stockholder in the global company, and Visa Inc. will have a minority investment interest in Visa Europe. As part of the restructuring, Visa Inc.'s board will consist of a majority of independent directors. A search for independent directors and a chief executive officer for Visa Inc. is underway.
Shares of rival credit card company MasterCard Inc., which went public in May of this year, closed Tuesday at $71.91 US on the NYSE, while shares of American Express Co. finished at $57.66 US. Shares of Morgan Stanley, owner of Discover Card, closed Tuesday at $75 US, also on the New York Stock Exchange.
