JPMorgan sees gain of about US$8 billion from Visa exchange offer

JPMORGAN Chase & Co said it expects to book an US$8 billion accounting gain after completing its part of a deal with Visa letting big banks restructure their stakes in the payments giant.

The plan, announced last year, allowed JPMorgan to tender 37.2 million shares of Class B-1 common stock in Visa in exchange for a combination of Class B-2 common stock and Class C common stock, the bank said on Monday (May 6) in a filing.

Visa said in September that it was working to amend a share structure implemented before its 2008 initial public offering (IPO). The unique structure – with three share classes – was designed to ensure that banks that owned Visa before the IPO would still be on the hook to cover costs arising from the firm’s long-running litigation with major US merchants, including Walmart and Target.

JPMorgan said it plans to donate about US$1 billion of Class C common stock to the JPMorgan Chase Foundation, prefunding its contributions to the institution for the next several years. The New York-based bank will book that as a non-compensation expense, according to the filing.

Visa said earlier Monday that it has accepted 240,677,470 shares of Class B-1 common stock tendered in the exchange offer. BLOOMBERG