CheckFree Withdraws Secondary Offering(6/24/99)
ATLANTA, June 24 /PRNewswire/ -- CheckFree Holdings Corporation
(Nasdaq: CKFR) announced today that it would not close on its 3.8 million
share follow-on stock offering, priced at $39 per share after market close on
Monday, June 21. Yesterday three banks announced the formation of a venture,
tentatively called "The Exchange," that would attempt to create a directory
and routing server to support them in delivering electronic bills. Although
the announcement was followed by a conference call in which the participating
banks stated that they would continue to use CheckFree services, the value of
CheckFree's shares fell by almost 24 percent.
Pete Kight, Chairman and CEO of CheckFree said, in announcing the
decision, "None of these banks ever spoke to CheckFree about this effort nor
indicated the formation of this group, nor gave any indication they intended
to make an announcement of such an organization. In any case, there is
nothing new about the commercial side of some banks wanting to find a way to
participate in electronic billing. We have been very successfully competing
for billers against the commercial departments of banks for more than a year
now, and our success has not been due to the banks' lack of a server.
"All of that aside, the market made it an easy decision to withdraw
CheckFree's share offering. We are, of course, deeply disappointed that the
market did not, in our view, properly assess the importance of yesterday's
announcement. Much more so, though, we were stung by implications that
CheckFree somehow managed to time the secondary offering to beat the banks'
announcement. Last week CheckFree executives sat across the table from more
than 50 institutional investors, many of whom requested an allocation of
stock. I don't ever want to walk back into the offices of these analysts and
portfolio managers and have to think that they might be wondering whether we
had been honest with them. Our credibility with our shareholders is more
important than any offering."
Kight concluded, "If speculation is going to remain uninformed,
withdrawing the offering is the only solution. We stated in all of our
analyst and investor meetings over the past week that CheckFree did not need
the funding from the secondary to complete our expanded Internet distribution
strategy, and this decision won't slow us down a single day. We have
sufficient resources to execute our plans, and we'll do so with force. Anyone
thinking that the timing of these events is going to freeze the market is
mistaken, and as good as this company is, and as powerful as our opportunities
are, I am not going to permit us to be distracted by a senseless controversy."
About CheckFree
Founded in 1981, CheckFree (www.checkfree.com ), the operating subsidiary
of CheckFree Holdings Corporation, is the leading provider of financial
electronic commerce services, software and related products. CheckFree
designs, develops and markets services that enable nearly three million
consumers to receive and pay bills over the Internet or electronically through
a variety of bill aggregation points, including banks, brokerage firms,
portals and interactive content sites on the Internet, and personal financial
management (PFM) software. CheckFree's range of services and products are
focused on enabling customers to make electronic payments and collections,
automate paper-based recurring financial transactions and conduct secure
Internet transactions.
After more than a year of beta testing, CheckFree launched the nation's
first fully integrated electronic billing and payment solution, CheckFree E-
Bill, in March of 1997. Today, the Company has multi-year contracts with more
than 50 of the nation's top billers to provide online billing and payment
through the CheckFree distribution network.
SOURCE CheckFree Holdings Corporation
-0- 06/24/99
/CONTACT: Laurinda Wilson, Media Relations, 678-375-1608, or
lwilson@checkfree.com , or Tina Moore, Investor Relations, 678-375-1278,
tmoore@checkfree.com , both of CheckFree/
/Web site: checkfree.com /
(CKFR)
CO: CheckFree Holdings Corporation; CheckFree
ST: Georgia
IN: FIN CPR MLM
SU: OFR
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