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 Visa, the world's largest credit and debit card company, said it
would pay 16.5 billion euros up front, with potential for an
additional payment of up to 4.7 billion euros based on revenue
targets four years after the close of the deal.
The upfront payment comprises 11.5 billion euros in cash and
preferred stock convertible into Visa Inc class A common stock
valued at 5 billion euros.
Visa Inc will issue senior unsecured debt worth $15 billion-$16
billion to fund the cash portion of the deal and increase a buyback
program for Class A common stock in 2016 and 2017 to offset the
effects of issuing the preferred stock.
The company, whose shares were down 1.3 percent at $76.54 in
premarket trading, said it would buy back an additional $5 billion
of shares in addition to a previously announced 17 percent increase
in its quarterly dividend.
Visa Inc and Visa Europe, a cooperative of European banks with over
500 million cards, were part of a global bank-owned network until
2007.
Most of the units merged to form Visa Inc, which went public in
2008, leaving Visa Europe as a separate entity.
Barclays Plc <BARC.L> is the most active bank in the Visa Europe
network and stands to make the most among the banks that will share
the proceeds of the buyout. More than 3,000 companies are expected
to profit from the deal.
Barclays could receive up to 1.2 billion euros in total, including
upfront cash, deferred cash and payments in stock, depending on how
the business and Visa Inc shares perform, a person familiar with the
matter said.
Barclays said in a statement that it expected to make a post-tax
profit of about 400 million pounds ($618.6 million) next year when
the takeover closes, but that only reflects the upfront cash element
of the deal.
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Nationwide Building Society said it expected its initial share to be
about 1 percent of the total proceeds, while Worldpay Group Plc said
it would get up to about 1.25 billion euros from the deal, including
592 million euros in cash up front.
Visa also reported on Monday that its net income jumped to $1.51
billion, or 62 cents per diluted class A share, in the fourth
quarter ended Sept. 30, from $1.07 billion, or 43 cents per share, a
year earlier.
Analysts on average were expecting 63 cents per share per share,
according to Thomson Reutes I/B/E/S.
($1 = 0.9071 euros)
($1 = 0.6466 pounds)
($1 = 0.9082 euros)
(Reporting by Rachel Chitra and Richa Naidu in Bengaluru; Editing by
Saumyadeb Chakrabarty)
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