Moneygram International Inc MGI is facing a bidding war, with Euronet Worldwide, Inc. EEFT jumping into the fray by offering to buy the money-transfer company for $15.20 per share, trumping Ant Financial's bid of $13.25 per share.p
A Look At Euronet’s Offer
Euronet says its offer represents about 15 percent premium to the price from Ant Financial, the payment affiliate of Chinese e-commerce firm Alibaba Group Holding Ltd BABA. The offer also represents a premium of about 28 percent to Moneygram’s closing price on the day prior to the Ant Financial deal.
Euronet said its offer for each MoneyGram common share and preferred stock, on an as-converted basis, values the company at more than $1 billion, in addition to the assumption of about $940 million of MoneyGram's debt outstanding.
On the other hand, Ant Financial’s offer values MoneyGram's common and preferred shares at about $880 million. Ant Financial said it would also assume or refinance MoneyGram's outstanding debt.
Rationale For The Offer
“Both companies have highly complementary distribution channels that will best position the combined business to grow in the highly fragmented global money transfer industry that is projected by the World Bank to expand by 4% annually over the next two years,” Euronet said in a press release.
“MoneyGram's focus on large retailers and national post offices combined with Euronet's focus on independent agents and broad set of consumer payment solutions will create a leading value proposition for customers worldwide,” Euronet added.
Euronet also noted its offer doesn't require a review by the Committee on Foreign Investment in the United States (CFIUS) and no closing condition related to securing change of control consents covering money transmitter licenses in the jurisdictions in which MoneyGram operates.
Euronet expects cost synergies of about $60 million in the second year post close, with meaningful accretion to adjusted earnings post close.
Shares of Moneygram closed Monday at $12.66, while Euronet closed at $82.96. On the news, MoneyGram's shares surged 22.6 percent to $15.52 in pre-market hours on Tuesday, while Euronet fell 2.59 percent to $80.81.
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