NEW YORK -- Following the lead of MasterCard Inc., Visa said yesterday that it plans to restructure its organization to create a new company and then sell shares in an initial public offering.
Since May, MasterCard shares have soared from an opening day price of $46. They've been so strong that several analysts downgraded the stock this week as overvalued. Yesterday, they dropped $2.41, or 3.35 percent, to $69.50.
Visa initially said it wouldn't follow MasterCard's lead and instead sought to add more independent directors and modify its operating rules.
The company did not say why it changed that view.
``This is a great time in Visa's history to make this transition -- we continue to be a leader in the payments industry, our growth and emerging market strategies are succeeding, and the growth potential in the global payments industry is tremendous," William I. Campbell, chairman of the Visa International board said.
Visa is currently a private membership association jointly owned by more than 20,000 financial institutions around the world.
A new company called Visa Inc. will be created through a series of mergers involving Visa Canada, Visa USA and Visa International. Visa Europe will remain a membership association.
Visa said the restructuring will improve organizational efficiency, address certain legal claims that exist in some markets, and increase access to capital.
A number of large merchants and retail trade associations have sued Visa USA and MasterCard over the fees they charge for processing credit card transactions, arguing that the card companies have colluded to keep out competition and set fees too high.
Visa said that after the reorganization is complete, it will begin the IPO process and list its shares on a major stock exchange. It expects most of the shares in the reorganized company will be sold to the public.
A stock offering could come in 12 to 18 months, Peter Hawkins, the head of Visa's restructuring committee, said on a conference call with reporters .