An extraordinary general meeting held yesterday by EFTPOS and e-commerce solutions vendor Keycorp has seen shareholders agree to sell a majority stake in the company to Telstra. As payment, Telstra handed over its EFTPOS payments carriage, installation and maintenance business to Keycorp.
According to a statement from Keycorp chairman Brian Clayton, the two have combined forces to tackle global Internet payment system opportunities. Leveraging the combined domestic market strength, Clayton said, "the partnership with Telstra will enhance Keycorp's credibility and reputation in international markets.
"Keycorp will have the financial strength to enter new markets and deliver significant contracts," he said. "Keycorp will also gain access to Telstra's contracts, marketing channels and considerable network infrastructure."
Keycorp issued 38.7 million new shares to Telstra at $11 each, which valued Telstra's EFTPOS operation at approximately $426 million.
Clayton's statement claimed the "alliance and combined business" will present Keycorp with raw earnings of $51.2 million and a net loss of $11.4 million in FY2001. At current prices, the deal adds over half a billion to the market capitalisation of Keycorp.
The general meeting also approved moves by Keycorp to acquire 100 per cent of the electronic funds transfer technology joint venture between it and CBA.