Visa’s IPO Could be Worth $18.8 billion, a Record

Visa Inc.’s initial public offering could raise as much as $18.8 billion and become the largest ever, according to its filing today with the U.S. Securities and Exchange Commission.

Visa announced it plans to sell 406 million Class A shares at $37 to $42, raising as much as $17.1 billion, though the San Francisco-based payments network could also sell another 40.6 million shares for $1.7 billion to the investors underwriting the IPO. The date of the IPO wasn’t listed.

Visa said it will use $10.2 billion of the proceeds to redeem shares in the company held by its 13,300 members, the banks that issue its cards worldwide. Another $3 billion will be held to cover antitrust litigation costs.

Last November, Visa announced it would pay American Express Co. $2.25 billion to settle a long standing antitrust suit (“Visa to Pay AmEx $2.25 Billion in Settlement,” Nov. 8, 2007). Still pending is a similar suit from Discover Financial Services.

Visa shares will trade on the New York Stock Exchange under the ticker V. It will follow rival MasterCard Worldwide which went public in May 2006 at $40.30 a share, raising $2.4 billion. MasterCard quickly became an investors’ darling, and now trades around $200.

Visa and MasterCard both run networks that process electronic payments, charging merchants, issuers and other servicers a fee for each transaction. Visa is the largest network, reporting nearly $3.5 trillion in worldwide payments volume on its cards through the 12 months ending June 2007. Unlike AmEx and Discover, Visa and MasterCard don’t take on the risk of issuing cards.

AT&T Wireless Group set the largest IPO on record, selling $10.6 billion in shares in 2000, according to the Reuters news service.