What is the impact of put back of European Visa System?
Visa has to come up with the cash -- 3-4 billion. Then does it face new competition from a start up in Europe? Or, does this just mean the EU banks are in such need of cash that they are selling the better stuff off their balance sheets? Any thoughts as to long-term impact on VISA?
I was wondering why the stock sold off yesterday, after this news. As JPM analyst claims, Visa has ample liquidity to fund this transaction, in addition it will add $0.10 eps. Visa for the past several yrs has been repurchasing about $2B of stock, so the capital needed for this transaction should not be a problem. I see this whole event as being positive for Visa, if and when the put option is exercised. Remember Visa bought Cybersource in 2010 for $2B which only added $0.5 to its EPS. Not sure about this news of EU bank wants to setup competition transaction platform. Not sure if anyone can come up with a "NEW" credit/debit card platform that can compete with the global presence of Visa or Mastercard.