Shareholders OK MasterCard’s Plans for a Public Stock Offering

The banks that own MasterCard Inc. cleared the way today for the bank card network to offer stock to the public and to reconstitute its governing board. By an overwhelming margin in a special meeting of shareholders, MasterCard’s shareholders approved the company’s proposal for an initial public offering that will lead to a drastic change in ownership of the worldwide card network.

MasterCard announced that a range of proposals related to its ownership and governance were approved in the vote, with no single proposal receiving less than 91% approval. The company said more than 85% of its outstanding shares, which are held by some 1,400 financial institutions, were voted at the meeting, the most ever. As a result of the vote, MasterCard will sell Class A common stock in an offering expected to raise $2.45 billion. Some 10% of the shares will be held by the MasterCard Foundation, a charitable endeavor.

The shareholder approval follows MasterCard’s announcement in August of its plans to go public. The move has been widely interpreted by observers as a means by which the Purchase, N.Y,-based network can more effectively defend itself against a rapidly multiplying number of antitrust lawsuits brought by merchants and charging MasterCard, Visa, and major banks of collusion in fixing interchange rates, the fees acquiring banks pay issuing banks on each card transaction.

The plans approved today include a new board of directors, which will include a majority of independent directors. MasterCard is expected to be listed on the New York Stock Exchange, under the ticker symbol “MA.”