China’s Ant Financial Services Group appears to have beat back a surprise challenge by Euronet Worldwide to acquire MoneyGram. After raising its offer for the money transfer giant by more than one-third, to $1.2 billion, Ant’s bid has earned the approval of MoneyGram’s board of directors. But the deal still must win regulatory and shareholder approval before Ant—the finance affiliate of Chinese e-commerce giant Alibaba Group—officially acquires MoneyGram and gains a massive foothold in the global remittance market.
Ant’s bid for MoneyGram appeared to be sewn up in late January, when the companies announced a definitive agreement under which Ant would acquire all outstanding stock of MoneyGram for $13.25 per share—a total of about $880 million. Before that deal could be finalized, payments processor Euronet threw a massive monkey wrench into the works in mid-March, making a surprise offer to nab MoneyGram to the tune of $15.20 per share, or $1 billion. Along with the higher purchase price, Leawood, Kan.-based Euronet also dangled the prospect of a smoother path toward regulatory approval of its bid, which—unlike Ant’s offer—would not require review by the Committee on Foreign Investment in the United States (CFIUS) or closing conditions related to transferring ownership of money transmitter licenses in the jurisdictions in which MoneyGram operates.
Soon after receiving the unsolicited bid, MoneyGram’s board determined that the Euronet offer was potentially a superior bid and it could further consider the proposal without violating the terms of its pact with Ant.
However, on April 16, MoneyGram and Ant announced that Ant had increased its bid to $18 per share, or $1.2 billion total—and that MoneyGram’s board has unanimously approved the offer. The board’s okay doesn’t mean the deal is done. MoneyGram shareholders will vote on the acquisition at a special meeting scheduled for May 16. Holders of 46 percent of the company’s outstanding shares, including those held by company executives, already have agreed to vote in favor of the offer.
Clearing the regulatory hurdles could prove more complicated. The companies said they already have made “significant progress” toward obtaining the necessary approvals, including obtaining antitrust clearance in the U.S. and filing for “certain state licensing” approvals. However, the deal still must earn the rubber stamp of the CFIUS, which has been a stumbling block in the past for deals in which Chinese companies have tried to acquire U.S. firms.
Euronet has said the Chinese ownership of Ant could hinder U.S. law enforcement effort in future AML and terrorism financing investigations. However, MoneyGram said all data will remain on U.S.-based servers and that MoneyGram will operate as an independent unit under Ant’s ownership, with all of MoneyGram’s “current procedures and protections related to data security and personally identifiable information” remaining intact.
Despite the boxes remaining to be checked, the companies said they expect the deal to close in the second half of 2017.
- MoneyGram Board Says Company Can Further Consider Euronet Proposal
- Euronet Outbids Ant Financial for MoneyGram
- Ant Financial Makes Giant Leap into Remittance Biz with MoneyGram Buy