Visa sets up litigation fund ahead of IPO
Visa sets up litigation fund ahead of IPO
By David Wighton in New York
Copyright The Financial Times Limited 2007
Published: June 23 2007 02:52 | Last updated: June 23 2007 02:52
Visa, the world’s biggest credit card network, on Friday unveiled plans to set up a litigation fund to protect investors in its forthcoming initial public offering from legal claims.
Under the plan, Visa’s US member banks will take on responsibility for the outstanding legal actions and will contribute billions of dollars from their flotation proceeds to an escrow account to pay claims.
Visa, which is owned by its member banks, is facing legal actions from US merchants and rivals Discover and American Express alleging anti-competitive practices.
The move by the US banks to take responsibility for the outstanding claims is designed to reassure potential investors in Visa’s IPO planned for next year.
Demand is expected to be strong following the dramatic performance of rival Mastercard’s share price since its IPO last May. The stock has more than quadrupled, valuing the company yesterday at almost $23bn. Visa, which is planning to sell half its shares, is likely to be valued at more than $25bn, according to Craig Maurer, an analyst at Calyon Securities.
Visa on Friday gave details of a restructuring that will see the creation of Visa Inc, combining all its operations outside Europe, which is the entity that will be floated.
Visa Europe is to remain separately owned by its European member banks, which its board believes will leave it better positioned to deliver a borderless payment market in line with the European Commission’s vision of a Single Euro Payments Area.
A document filed with the US Securities and Exchange Commission on Friday showed Visa Inc’s pro forma net income rising 13 per cent to $526m in the year to March 31 2007 on operating revenue of $2.36bn.
By David Wighton in New York
Copyright The Financial Times Limited 2007
Published: June 23 2007 02:52 | Last updated: June 23 2007 02:52
Visa, the world’s biggest credit card network, on Friday unveiled plans to set up a litigation fund to protect investors in its forthcoming initial public offering from legal claims.
Under the plan, Visa’s US member banks will take on responsibility for the outstanding legal actions and will contribute billions of dollars from their flotation proceeds to an escrow account to pay claims.
Visa, which is owned by its member banks, is facing legal actions from US merchants and rivals Discover and American Express alleging anti-competitive practices.
The move by the US banks to take responsibility for the outstanding claims is designed to reassure potential investors in Visa’s IPO planned for next year.
Demand is expected to be strong following the dramatic performance of rival Mastercard’s share price since its IPO last May. The stock has more than quadrupled, valuing the company yesterday at almost $23bn. Visa, which is planning to sell half its shares, is likely to be valued at more than $25bn, according to Craig Maurer, an analyst at Calyon Securities.
Visa on Friday gave details of a restructuring that will see the creation of Visa Inc, combining all its operations outside Europe, which is the entity that will be floated.
Visa Europe is to remain separately owned by its European member banks, which its board believes will leave it better positioned to deliver a borderless payment market in line with the European Commission’s vision of a Single Euro Payments Area.
A document filed with the US Securities and Exchange Commission on Friday showed Visa Inc’s pro forma net income rising 13 per cent to $526m in the year to March 31 2007 on operating revenue of $2.36bn.
posted by Carlos T Mock @ 10:46 AM
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