New York: Euronet Worldwide Inc. offered to buy MoneyGram International Inc. in a cash deal that the firm said values the company at a higher premium than a competing bid from billionaire Jack Ma’s Ant Financial.
Euronet is offering $15.20 for each share of MoneyGram and would assume $940 million of the company’s debt, according to a statement on Tuesday. The deal would value MoneyGram, a US money-transfer service with a network of 2.4 billion bank and mobile accounts, at more than $1 billion and is a 15% premium over Ant’s proposal, Euronet said.
MoneyGram agreed in January to the deal with Ant, the financial-technology company that used to be a part of Alibaba Group Holding Ltd. and is still controlled by Ma. Euronet, based in Leawood, Kansas, is a payments company with more than 35,000 ATMs and 160,000 point-of-sale terminals.
“The proposal offers stockholders a clear and significantly more certain path to a faster closing with no required review by the Committee on Foreign Investment in the United States,” Euronet said in the statement.
MoneyGram, which lets consumers and businesses send cash to one another, surged 23% to $15.51 in early New York trading at 7:51am Tim Danaher, a spokesman for Ant at Brunswick Group, declined to comment.
A substantial portion of MoneyGram’s business could come under pressure from President Donald Trump’s stance on immigration and trade, because many immigrants use the firm to transfer money from the US to their families. Mexico represents about 10% of MoneyGram transactions, according to Bloomberg Intelligence. Trump proposed a plan last year to cut off the remittances Mexican immigrants living and working in the US send home.
Ant has been seeking to expand abroad as competition in its home market heats up, and the MoneyGram purchase was seen as a way to further that goal after recent partnerships with Paytm in India and Ascend Money in Thailand.
Euronet has tried to acquire MoneyGram before. It was among the bidders when the company put itself up for sale in 2013, and made a $1.65 billion bid in 2008 that was thwarted when the target sold a majority stake to Thomas H. Lee Partners and Goldman Sachs Group Inc.
Wells Fargo & Co. is advising Euronet, with Gibson Dunn & Crutcher LLP providing legal advice. Bloomberg