Payments processor Euronet is dangling more money and the potential for faster, simpler regulatory approval in front of MoneyGram investors, significantly outbidding China’s Ant Financial Services Group for the No. 2 U.S.-based money transfer company.
In January Ant Financial, the online and mobile financial services affiliate of Chinese e-commerce giant Alibaba Group, offered approximately $880 million to acquire MoneyGram, a deal that was expected to close in the second half of the year. Euronet announced March 14 an offer to acquire all outstanding MoneyGram common and preferred shares for $15.20 in cash, resulting in a $1 billion deal.
The potential bidding war comes as global remittances are expected to top $650 billion in 2018, according to the World Bank.
In addition to the higher monetary offer, it’s the regulatory approval that Leawood, Kan.-based Euronet appears to be dangling in front of MoneyGram like a carrot. “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 and no closing condition related to securing change of control consents covering money transmitter licenses in the jurisdictions in which MoneyGram operates,” the company said. Dallas-based MoneyGram is a licensed money transmitter in all 53 U.S. states and territories and more than 200 countries.
Euronet’s proposed acquisition would benefit customers, agents, employees and stakeholders because of their complementary offerings and distribution channels, according to the company. While MoneyGram, the second-largest provider of money transfer services based in the U.S., focuses on large retailers and national post offices, Euronet focuses on independent agents.
Euronet also cited past successes bringing companies into the fold and driving incremental growth. For example, since it acquired Ria in 2007, Euronet has grown its money transfer segment from just more than $200 million in pro forma revenue to more than $800 million, according to the company. Euronet has integrated more than 35 acquisitions, including four money transfer businesses—Ria, IME, HiFX and XE.
This latest offer by Euronet isn’t its first dance with MoneyGram. Euronet offered to acquire MoneyGram for approximately $1.65 billion in stock in December 2007. The offer, however, was rejected and in February 2008, Euronet announced it would not make a new offer at that time.
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