The board of the Credit Union 24 electronic funds network, one of two surviving major credit union-owned EFT networks, last week called off the planned merger with Concord EFS, the parent of Star Systems network.
James Park, president of Credit Union 24, said the two sides could not reach a definitive merger agreement, even after extending negotiations beyond February's expiration of a 60-day letter of intent. "The bottom line is, we've been at this process since April of last year and we have had a lot of opportunities put on hold while we tried to complete it (the sale of the company)," he said.
Termination of the $30-million cash acquisition came the day after shares in Concord, the largest independently owned EFT network, slumped 19% to a 52-year-low of $8.92 after news reports suggested the company is having difficulty renewing some of its major customer contracts amidst increased competition in the market. But Park indicated Concord's slumping stock price was not the determining factor in the decision to call off the deal, as the acquisition would not have included shares in Concord. "It was strictly a cash deal," he said.
The Concord deal never got to the point that a vote by shareholders of Credit Union 24 was scheduled.
The board also agreed to take the network, providing ATM and point-of-sale services to more than 400 credit unions, of the market, at least for the time being. That means a deal with The CO-OP Network, which submitted an unsuccessful offer for Credit Union 24 last winter, is off the table, as well. "That just means for everybody," Park said.
Officials with The CO-OP said last week they were unaware of the termination of the deal and will wait for the dust to settle before deciding whether to pursue their interest in a combination of the two credit union networks.
The termination of the deal will allow Credit Union 24 to enter into several major initiatives over the coming weeks and months, said Park. "We've just kind of put on hold all of these major opportunities we've had and just now have gotten back to being able to pursue them," said Park.