MasterCard IPO Priced Lower
WALL STREET - (05/25/06) MasterCard International pricedits long-awaited initial public offering Wednesday night at $39 ashare, slightly below the markets expectations. Theworlds second-largest payments company plans to raise asmuch as $2.4 billion with the sale of 61.5 million shares,representing about 46% of the company, when the deal hits themarket Thursday. The remainder of shares will continue to becontrolled by its large bank owners. Four large banks: Bank ofAmerica, Citibank, JP Morgan Chase and HSBC, own more than 30% ofthe cards company. MasterCard had originally planned to price theshares between $40 and $43. Proceeds from the offering will mostlybe used to buy back the companys Class B shares, which areheld by MasterCards 1,400 bank-owners. About $650 million ofthe proceeds will be used to build a legal defense fund to financepotential awards in the more than 40 antitrust suits broughtagainst the cards giant by merchants. Visa USA, the worldslargest payments company and also owned by large banks, has said ithas no current plans to go public.