SAN FRANCISCO – Visa Inc. said Friday it plans to raise as much as $10 billion with its previously announced initial public offering, making it one of the biggest U.S. IPOs ever.
About 1,700 financial institutions will receive Class B common shares in the IPO. The Class B shares will be convertible into Class A shares for public trading, but must be held for at least three years from the IPO date. Class B shares will earn dividends, but not carry any voting rights.
Visa will use the proceeds from the offering to redeem its Class C shares, which will all go to Visa Europe, the only Visa-named entity that has voted against being rolled up into Visa Inc. (Visa USA and Visa Canada are participating in the roll-up).
Redemption of both the Class B and Class C shares is dependent on the settlement of billions of dollars in pending lawsuits, including last week’s $2.25 billion settlement with American Express, a pending suit with Discover Financial, and numerous other suits.
Six of the nation’s biggest banks will receive a majority of the Class B shares, a total of 58.5%, including JP Morgan Chase (22.3%); Bank of America (11.5%); National City Corp. (8%); Citigroup (5.5%); U.S. Bancorp (5.1%) and Wells Fargo (5.1%).
Visa shares are being widely coveted by investors, who have seen the price of MasterCard shares quadruple since their May 2005 IPO to almost $200.
