Moneygram International Inc (MGI) Stock Flies on Ant Financial Bid

Gladys Abbott
April 18, 2017

Ant Financial Services Group has raised its bid for US money-transfer company MoneyGram International around $1.2 billion - topping a rival offer and making China's biggest online-payments firm once more the leading contender in an increasingly politicized takeover battle. Ant's new offer easily beats the $15.20 per share or $1 billion bid proposed by Euronet.

The offer price of $18.00 per share provides approximately $320 million in additional cash consideration to MoneyGram stockholders from the prior agreement.

MoneyGram's board unanimously approved the offer, which is a 64% premium over the stock's average trading price ended late January. Both companies strive to develop the common business, facilitating money transfers for customers and offering a wider selection of services for the agents who serve them around the world.

Ant Financial sweetened its bid for MoneyGram International by more than a third, beating a rival offer to gain approval from the United States electronic payment firm's board, although it still faces regulatory hurdles. A group of investors owning 46% of the voting rights have given their nod as well, notes TechCrunch.

Ant Financial's higher offer for Moneygram International Inc has it outbidding Euronet Worldwide, Inc. The tie-up follows recent investments in payment firms in India, Thailand, South Korea and the Philippines.

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MonayGram "will add valuable cross-border remittance capabilities to the Ant Financial ecosystem, serving our more than 630 million users globally..."

Euronet had earlier said that a deal with Ant Financial could take USA law enforcement agencies into a confrontation mode with MoneyGram while investigating money laundering and terrorist financing.

Still, it can not be ignored that a deal with Euronet would be more agreeable to USA policymakers amid the increasing tensions between Beijing and Washington over trade and foreign policy. But first it needs to clear regulatory reviews, including one by the Committee on Foreign Investment (CFIUS), a USA inter-agency panel that looks at acquisitions for national security risks. The CFIUS checks if the acquisition poses any national security risk.

"CFIUS may lengthen the process.I don't think CFIUS would be a deal killer" said Jeffrey Sun, Shanghai-based partner with law firm Orrick, Herrington & Sutcliffe. It was said previous year to be considering a float in Hong Kong in the first half of 2017.

"Should this transaction be approved, the Chinese government would gain significant access to, and information on, financial markets and specific global consumer money flows", said USA congressmen Robert Pittenger and Chris Smith.

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