Metris Cos., one of the nation's fastest-growing credit card marketers, is expected to have an initial stock offering Thursday, but not without some controversy.
A union representing employees of Fingerhut Cos., which is spinning off Metris, last week filed a complaint with the Securities and Exchange Commission alleging that Metris made false and misleading claims its registration statement.
The Union of Needletrades, Industrial, and Textile Employees asked that Metris amend the registration to disclose that Fingerhut is planning to open a credit card bank, using its proprietary data base to market private- label cards.
The union said Metris will be using the same data base to market bank cards and other financial services, so the two companies would be competing for customers.
"That's business, and those two companies can decide for themselves if they want to do that," said Michael Zucker, a union spokesman, in an interview. "But they've got to tell people about it."
Fingerhut said the union's claims were false and misleading. The Minnetonka, Minn.-based company said it disclosed in its Metris registration statement that it will not issue a competing general purpose credit card similar to the MasterCard issued by Metris, but it expects to offer to its customers a private-label card.
Fingerhut said the registration statement "contains all necessary disclosure relating to these matters," and that any complaint like the union's "will be vigorously contested."
Metris registered in August for the initial offering of about 2.8 million shares of common stock at $14 to $16 a share. After the offering, Fingerhut would own about 85% of the outstanding shares.
Metris, which is incorporated in Delaware but has headquarters in Minnesota, is led by Ronald N. Zebeck, who is best known in the card business for launching the General Motors MasterCard. He was hired by Fingerhut to create a credit card program.
Direct Merchants Credit Card Bank began issuing MasterCard-branded cards in 1995 for Fingerhut. By midyear, Metris reported having 1.1 million cards and $1.06 billion in outstandings.
In its complaint, the union said Fingerhut had filed a charter application with the Office of the Comptroller of the Currency to open a credit card bank under the name Fingerhut National Bank. On July 18, the union said, the OCC granted preliminary approval.
Fingerhut says the union represents about 2,600 of its employees. The union said that some of its members are Fingerhut shareholders, and that it is acting on their behalf.
