February 25, 2008
Visa Plans $18.8 Billion IPO
Visa filed its preliminary prospectus, dated February 25, 2008, for its IPO. It proposes to offer 406,000,000 shares of Class A common stock with an expected price between $37-42 per share, for a maximum aggregate offering price of $18,757,200,000. This will make it the largest U.S. IPO. This IPO has been expected since Visa completed its reorganization in October 2007. The prospectus identifies three uses for the proceeds: (1) to establish a $3 billion escrow account to pay for settlements and judgments in connection with antitrust litigation related to interchange fees and other related practices, (2) to use $10.2 billion to redeem class B and class C shares held by institutional investors, and (3) general corporate purposes.
GAO Releases Report on Hedge Funds
The U.S. Government Accountability Office (GAO) released a report today on Hedge Funds (GAO-08-200). The Report explains that after the near collapse of Long-Term Capital Management in 1998, regulators generally have increased reviews, by means of targeted examinations, of systems and policies of their regulated entities to mitigate counterparty credit risks, including those involving hedge funds. The Report describes those measures and explores the potential for systemic risk from hedge-fund related activities. It notes that regulators have used risk-focused and principles-based approaches to better understand the potential for systemic risk and respond more effectively to financial shocks. The GAO concludes that these are positive steps, but it is too soon to evaluate their effectiveness.
Nasdaq Will Close Deal on OMX
The Wall St. Journal has an interview today with Nasdaq CEO Robert Greifeld, as the exchange prepares to close its $4.4 billion acquisition of Nordice and Baltic exchange operator OMX AB. To accomplish the deal, Nasdaq partnered with Borse Dubai, which will end up with a 19.9% stake in Nasdaq OMX Group. WSJ, Nasdaq Chief Turns Page.
Wachovia Backs Out of Clear Channel Sale of TV Stations
While Clear Channel and Providence Equity Partners renegotiated their deal and reduced the price that Providence will pay for a group of television stations, Wachovia, one of the three banks that agreed to finance the original deal, went to court seeking a declaratory judgment that it has no obligations under the revised deal. If the deal falls through, Wachovia may have to pay the $45 million breakup fee to Clear Channel. In addition, while the deals are not related, it raises additional doubt about the $20 billion buyout of Clear Channel, since Wachovia is one of the banks financing that deal. WSJ, Clear Channel, Providence Agree on TV-Station Deal; NYTimes, Bank’s Suit May Hurt Deal for Clear Channel Unit.
Electronic Arts Bids for Take-Two
Electronic Arts Inc. (Madden NFL) announcced an unsolicited $2 billion cash offer for Take-Two Interactive Software (Grand Theft Auto), after Take-Two's board rejected the $26 per share offer (50% premium over Friday's closing price) as inadequate. The offer comes about two months before Take-Two will ship Grand Theft Auto IV, a hghly anticipated game. Take-Two's Chairman said the offer was "opportunistic" and "woefully undervalued." Take-Two has had new management since a dissident group of shareholders voted in a new board last March. Under its former management, Take-Two had legal problems relating from both stock options backdating and accounting fraud. WSJ, Electronic Arts Offers $2 Billion for Take-Two; NYTimes, Game Maker in $2 Billion Bid for Rival.