HSBC Completes Acquisition of Metris Companies
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HSBC
Completes Acquisition of Metris Companies
HSBC Finance Corporation announced Thursday that its acquisition
of credit card issuer Metris Companies has been completed.
HSBC paid Metris shareholders approximately $1.6 billion in
cash. Each holder of Metris common stock received $15 a share.
Metris
got into serious financial problems in 2001 when its strategy
of issuing cards to “sub-prime” consumers backfired
amidst the severe economic slowdown. More recently, Metris had
begun a turnaround predicated on lending to “near prime”
customers — those with credit still below average, but not
the bottom of the barerel.
Metris
was formed in 1994 and became a public company in 1996. The
company issues credit cards through Direct Merchants Credit
Card Bank, N.A., a wholly-owned subsidiary headquartered in
Phoenix, Arizona. HSBC has not announced whether the same issuing
process will continue, or if credit cards will be re-branded.
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