A bidding was has erupted between two of the nation's largest automated teller machine networks over Louisiana's Gulfnet network.
The Honor network, which is operated by Southeast Switch Inc., based in Maitland, Fla., has matched a bid of $8 million for Gulfnet from Delaware-based Electronic Payment Services Inc., which operates the Mac network, according to sources close to the negotiations.
Mac and Honor are two of the nation's most influential networks, and both are looking to expand the regions they serve.
Operates in Five States
While Gulfnet is not terribly large -- both Bank America Corp. and Citicorp run more teller machines individually than the 2,100 ATMs operated by all Gulfnet member institutions -- the network is in a strategic location that makes it attractive to both EPS and Honor.
Gulfnet operates mainly in Louisiana and Mississippi, but it also maintains a presence in Tennessee, Texas, and Arkansas.
"If you look at the map, you could see where we would be attractive to several networks," said Del Tonguette, president of Gulfnet.
Talks Since 1988
"We do not consider ourselves to be a long-term survivor of the [regional network] consolidation, but it's not clear yet who we will merge with."
According to Mr. Tonguette, Gulfnet, which was founded in 1985, has been talking about merging with various larger companies since 1988. But until recently, most networks have shown only a passing interest in Gulfnet.
Experts say the rising interest in the Louisiana network can be traced to the same source as most of this industry's recent major changes: Electronic Payment Services.
When EPS, which most experts cite as the prototypical modern network, expressed serious interest in acquiring Gulfnet in early 1993, competing networks swung into a defensive mode and placed bids of their own.
"No one wants EPS in their backyard. That should be obvious," said one network executive, who requested anonymity.
Perhaps inevitably, the bidding has shaken down to the two largest players, EPS and Southeast Switch, with the latter of these placing the most recent bid.
The geographical area at stake is outwardly more contiguous with the Southeast Switch's Honor network, which operates mainly in Florida and the surrounding states.
But, despite the fat that most industry executives associate EPS and its Mac ATM logo with the northeastern states, EPS also has a significant presence in the south, by virtue of Banc One's equity position in the network.
Bank One already operates a unit in Texas, and the Ohio-based holding company is also considering the acquisition of Premier Bancorp in Louisiana.
With the bids for Gulfnet reportedly close to one another, and with both EPS and Honor maintaining a presence in the area served by Gulfnet, many experts believe the decision will ultimately be based on the intangibles that the respective networks bring to the table.
"There are more to these bids than just monetary issues -- there's network philosophies and a lot of other things," said Thomas O. Bennion, president of Southeast Switch. "I suspect that there's going to be a process of some back and forth before we hear whether [Gulfnet's] going north or south."