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Mastercard planning to sell 49% of company through IPO
By Julie Creswell and Eric Dash
New York Times
MasterCard, the world's second-largest credit-card brand, announced plans Wednesday to pursue an initial public offering that could value the company at more than $10 billion.
By going public, MasterCard can raise capital to lead a stronger charge against Visa International, its larger rival. But the move also could be an effort to try to insulate the banks that issue its debit and credit cards as lawsuits against MasterCard mount, analysts said.
MasterCard and Visa are payment associations controlled by thousands of members ranging from small credit unions to global banks. They are marketing machines and policy-makers that set the fees and rules that merchants must follow, but they do not directly issue cards to consumers; that task is left to their member banks.
Among MasterCard's biggest issuers is Citigroup, which would bear a large portion of any potential liability in lawsuits against MasterCard.
MasterCard said it planned to sell 49 percent of the company to the public, which will hold 83 percent of the voting rights in the company. The 1,400 financial institutions that are members of the card association will retain a 41 percent stake in the public company. They also will receive an undisclosed portion of the proceeds raised in the public offering. The remaining 10 percent stake in MasterCard will be controlled by a newly formed charitable foundation.http://www.mercurynews.com/mld/mercurynews/business/12532271.htm
By Julie Creswell and Eric Dash
New York Times
MasterCard, the world's second-largest credit-card brand, announced plans Wednesday to pursue an initial public offering that could value the company at more than $10 billion.
By going public, MasterCard can raise capital to lead a stronger charge against Visa International, its larger rival. But the move also could be an effort to try to insulate the banks that issue its debit and credit cards as lawsuits against MasterCard mount, analysts said.
MasterCard and Visa are payment associations controlled by thousands of members ranging from small credit unions to global banks. They are marketing machines and policy-makers that set the fees and rules that merchants must follow, but they do not directly issue cards to consumers; that task is left to their member banks.
Among MasterCard's biggest issuers is Citigroup, which would bear a large portion of any potential liability in lawsuits against MasterCard.
MasterCard said it planned to sell 49 percent of the company to the public, which will hold 83 percent of the voting rights in the company. The 1,400 financial institutions that are members of the card association will retain a 41 percent stake in the public company. They also will receive an undisclosed portion of the proceeds raised in the public offering. The remaining 10 percent stake in MasterCard will be controlled by a newly formed charitable foundation.http://www.mercurynews.com/mld/mercurynews/business/12532271.htm
