Del Tonguette's Gulfnet is up for grabs again.

The electronic banking network, which covers a large swath in the South with automated teller machines in casinos and vacation destinations like New Orleans, has been courted before but never given its hand in merger.

Things are different now, though, said the outspoken president of the Slidell, La.-based network he built from the ground up.

"Merger activity is more aggressive than it was," said Mr. Tonguette; "our value in the market is equal to or greater than (what) it was; and our volumes and revenues have increased."

On second thought, he said, "it might be a good opportunity for staying Gulfnet."

Surrounded by giant networks Honor, Pulse, and MAC, Gulfnet has survived the past 10 years through a combination of service, success, and the quirky management style of its 59-year-old leader.

The network, 14th-largest in the country, is profitable, posting 11 million transactions a month with 10,866 ATMs, 12,465 point of sale terminals, and 20% annual growth.

Mr. Tonguette's golden rule, "Always return a phone call on the same day if you want to work here," creates a homey atmosphere for members who hail from community banks in Mississippi, Louisiana, Arkansas, Texas, and Tennessee.

A free consulting service, Chart the Course, offers smaller banks the kind of attention their large competitors pay thousands of dollars to get. And Mr. Tonguette, who says he's "not a banker - my skill is marketing," has endless ideas for keeping the Gulfnet brand prominent in its patrons' minds.

His brand of publicizing is unique. At the recent Gulfnet Symposium '96 in Biloxi, Miss., where flashy casinos line the edge of the vast Gulf Coast beaches, Mr. Tonguette hired the Delta Festival student ballet troupe to perform at an 8 a.m. opening ceremony.

Though they wore tutus and toe shoes while pirouetting to one of Franz Liszt's Hungarian Rhapsodies, the 30-odd dancers received sweatshirts with Gulfnet's big red "G" logo to take home. "They'll wear them all winter. That's good marketing," he said.

Other offbeat strategies include pictures of himself and member services manager Denise Stigge on most Gulfnet brochures to create an atmosphere of familiarity and celebrity.

"Every one (of the members) wants to get to know Denise," he said. "I've made her famous." In printed materials, stories about cleaning women and coffeehouses illustrate his ideas on the electronic funds transfer business, still a mystery to many a small-town southern banker.

Mr. Tonguette, a retired Air Force pilot, has a long history in the banking business. Starting out in 1968 at Banc One Corp. in Columbus, Ohio, (then known as City National Bank), he worked in the EFT divisions of several Ohio banks over the years.

In 1986, he was recruited to get Gulfnet off the ground. Working with a staff of four and a flair for the outrageous, Mr. Tonguette drew his unorthodox ideas from a number of sources, including famed consultant James O. McKinsey; the late communications theorist Marshall McLuhan; futurist John Petersen, author of "The Road to 2015"; and even Wired magazine.

He likes to speak his mind, and has a definite opinion about regional networks - they shouldn't exist.

Mr. Tonguette is convinced the national networks Plus and Cirrus, owned by Visa U.S.A. and MasterCard International, respectively, are the only ones banks need. In five years, he said, only four or five regionals will be left.

Gulfnet's equity owners seem to appreciate his qualities. "Del is very dynamic," said Robert Martin, senior vice president, Magnolia Federal Bank for Savings, Hattiesburg, Miss., at a cocktail reception for Gulfnet's symposium. "He certainly stays in the forefront of everything we see and know about the EFT industry."

Mr. Martin, a member of Gulfnet's executive committee, called the industry veteran "open-minded, practical, and objective."

Though he's worked hard to make the network a success, the maverick chief insists his logo will disappear. "I've recommended the board should merge," Mr. Tonguette said.

Recently Gulfnet sent out an informal letter requesting proposals for a new processor as its five-year contract with Trust Commerce Corp., the network's original owner, expires. Confronted with two offers for more substantial relationships among seven bids, the board, which convened during the symposium, is more optimistic about merging than it was three years ago, when near-deals fell through.

Though Mr. Tonguette didn't name the two, conclusions could be drawn from the list of bidders. Electronic Payment Services Inc., owner of the MAC network, and Texas Commerce Bank, the Chase Manhattan Corp. unit that runs the Pulse EFT Association switch, would be the most logical suitors.

Gulfnet and Pulse agreed to a shared network and marketing alliance in 1995, with Mr. Tonguette urging Gulfnet members to sign up with Pulse. Though he still considers Pulse a competitor, he said, "if I didn't offer banks access to Pulse, they'd go directly. If they come through me, I get 2 cents on every transaction."

Stan Paur, president and chief executive of Houston-based Pulse, said his network has "made it clear to Gulfnet that, if they're interested in expanding our relationship, we'd explore our options."

Mr. Paur noted that 175 banks in Louisiana and 30 in Mississippi now belong to both Pulse and Gulfnet. "Consolidation would make sense," he said.

There's a limit to what he's willing to pay, however. "We'd entertain any proposition that was reasonable," he said, "but some of the asking prices for these programs are getting out of hand."

Still, he said, "If they go on the block, somebody will be willing to pay a lot of money for them."

A spokeswoman for Electronic Payment Services said the network "continues to be interested in any opportunity to grow its terminal-driving business and expand the MAC brand."

Electronic Data Systems Inc., a nonbank ATM deployer that bought the Transaxion network in Massachusetts, may be another suitor.

Neil Marcous, executive vice president of electronic markets at Electronic Data in Morris Plains, N.J., said it is "very interested in a relationship with Gulfnet," though he said an alliance rather than a purchase would be more attractive to the New Jersey company.

Other companies bidding for the processing business are Midwest Payment Services Inc., a unit of Fifth Third Bank, Cincinnati; Mellon Bank Network Services, a unit of Mellon Bank Corp., Pittsburgh; Trust Commerce; and M&I Data, Milwaukee.

Conspicuously absent from the running is Southeast Switch Inc., owner of the Honor network, which has been actively merging and acquiring networks. The company is still awaiting regulatory approval for its Most and Alert mergers.

Mr. Tonguette said he had not solicited a processing offer from the company but "if Tom Bennion calls, I'll answer the phone."

Thomas O. Bennion, president and chief executive of Southeast Switch in Maitland, Fla., said the neighboring networks "spent a lot of time and energy trying to put a merger together before" but failed. Even so, he added, "if Del gets serious, I hope he'll give us the opportunity to take another look."

Mr. Tonguette has been instructed by his executive committee to review all options, including merger or acquisition offers, and return Dec. 31 with a recommendation.

His job may disappear if the network does, but Mr. Tonguette said he's not worried. Wearing tortoise-shell specs, a denim shirt, and khaki pants while drinking coffee in Sisters Restaurant at Biloxi's Grand Casino, he explained, "I know I'll find something."

With a view of the Gulf of Mexico for a background and slot machines ringing just outside the door, he added, "Change is exciting. I like excitement."

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