SAN FRANCISCO – Visa Inc. yesterday set a projected value on its shares in its planned initial offering, including the Class B shares that will be apportioned to credit union and bank owners of Visa.
Visa said it plans to raise as much as $18 billion with the sale of 447 million Class A common shares at as much as $42 each, which would make it the largest IPO ever. The shares will be listed on the NYSE under the symbol “V.”
The proceeds from the IPO will be used to buy back 123 million Class B shares being issued to credit unions and banks at a ratio of 0.72 Class A shares for each Class B share, making the approximate value of each Class B share $30.
Visa will use $10 billion of the proceeds to buy back Class B shares from about 825 credit unions and banks that will be receiving the stock in the IPO.
Visa also plans to redeem Class C shares, which are being issued to large international banks that are owners of Visa.
Regulators have notified credit unions they may continue to hold Visa shares issued in the IPO, which is expected to be one of the hottest offerings in years. That’s because shares in smaller rival MasterCard have soared more than 500% since their debut in May 2006. As a result, credit unions are expected to hold their Visa shares.
The cards giant said it also plans to set aside $3 billion from the IPO in a legal escrow fund, as the company is faced with billions of dollars in legal liabilities.
