Visa Files for $10B IPO

Visa Inc. has filed for its long-anticipated initial public offering, a $10B affair that would be the second largest IPO in U.S. history behind AT&T Wireless, which raised $10.6B in April 2000. The deal would be the ninth-largest IPO ever. Rival MasterCard raised $2.4B in its May 2006 IPO; shares have since risen five-fold. The world's largest card payments processor said it earned $771M on revenue of $3.73B for the first nine months of the year and $437M on revenue of $3.91B in 2006. Visa processed 44B transactions totalling $3.2 trillion in 2006, it said, compared to 23.4B transactions totalling $1.9 trillion for MasterCard. It didn't disclose how many shares it planned to offer or what its anticipated ticker symbol would be. Visa's stockholders include J.P. Morgan Chase, Bank of America, National City Corp., Citigroup, U.S. Bancorp and Wells Fargo. Visa didn't say whether any of those holders intended to sell shares in the IPO. Last week, Visa reached a $2.25B settlement with American Express regarding a three-year old suit that alleged Visa had engaged in illegal anti-competitive practices. Visa plans to use part of the IPO proceeds to pay that settlement. Lead underwriters will be Goldman Sachs, JP Morgan Securities, Banc of America Securities, Citigroup Global markets, HSBC Securities, Merrill Lynch, UBS Securities and Wachovia.

Sources: AP, MarketWatch, NY Times
Commentary: How To Profit From The Visa IPO Before It Goes Public? • Visa IPO Around The Corner • Visa IPO Should Pose Challenge to MasterCard
Stocks to watch: MA, AXP, JPM, C, WFC, NCC, BAC.
Earnings call transcript: MasterCard Q3 2007

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