Visa may raise up to $18.8 billion in largest US initial public offer

25 February 2008

Mumbai: Visa Inc, the world's largest credit-card network, proposes to raise as much as $18.8 billion in what would be the biggest initial public stock offer in the United States.

Visa's planned initial offer would also be the world's second-biggest, after the $22 billion raised by Industrial & Commercial Bank of China Ltd. in 2006.

In its filing with the US Securities and Exchange Commission, Visa said it plans to sell 406 million Class A shares at a price band of $37 to $42 each, to raise a total of  $15 billion to $17.1 billion.

The San Francisco-based company said it might sell another 40.6 million shares to meet demand, boosting the potential size of the IPO to $18.8 billion.

Visa plans to use $10.2 billion of net proceeds of the issue to redeem other shares, and the balance for general corporate purposes. It hopes to pay quarterly dividend of 10.5 cents a share, ie, a dividend yield of about 1 per cent.

Visa also said it would set aside $3 billion of the IPO proceeds to cover costs of litigation, involving issuers such as American Express Co and Discover Financial Services, as well as major retailers that have accused card networks of price fixing.