Archer buying Keycorp

Eftpos services firm Keycorp looks likely to be sold to a fund managed by Archer Capital if shareholders in the target endorse a scheme of arrangement proposed yesterday.

Archer has bid 58 cents a share, which values the firm at $47 million.

It's all a far cry from the time a decade ago when Telstra inexplicably agreed to fold its Eftpos "carriage" business into the listed payment terminal and smart card maker in a deal that valued Keycorp at $800 million.

Whatever grand plans existed for Keycorp to become a champion of technological knowhow soon evaporated as the firm's key businesses struggled to make profits and were progressively sold off. Keycorp was dependent on Telstra for capital, and even solvency, at times during the intervening years.

Keycorp these days is essentially a domestic services firm that keeps banks' Eftpos fleets ticking over.

The agreed price for the bid is a 42 per cent premium to Keycorp's enterprise value, according to Keycorp, and a premium of between 15 per cent and 21 per cent to the recent price of shares, depending on the time used to form a view.