Ant Financial Services Group, the payments affiliate of Chinese e-commerce giant Alibaba Group Holding, has now increased its offer for electronic payment firm MoneyGram International Inc by almost 36 percent. The firm has increased its offer to $18 per share in cash from $13.25, and the transaction is valued at around $1.2 billion.
This bid outbids Euronet Worldwide Inc., which offered $15.20 a share for the Dallas-based payments company last month. Euronet, which has a network of more than 35,000 ATMs and 800,000 point-of-sale terminals, has twice bid for MoneyGram, with offers in 2007 and again in 2013.
The MoneyGram board of directors has unanimously approved the Amended Merger Agreement, under which, MoneyGram will merge with Ant Financial. A successful deal would be the Ant’s first major step to expand its business in the overseas market.
MoneyGram will hold a special stockholder meeting on May 16 to vote on Ant Financial’s latest bid.
The offer price of $18.00 per share provides approximately $320 million in additional cash consideration to MoneyGram stockholders from the prior agreement. The per share consideration represents a premium of approximately 64 percent to MoneyGram’s volume weighted average share price over the prior three month period ended January 25, 2017, the day prior to the original transaction announced with Ant Financial.
Doug Feagin, President of Ant Financial International, said in the statement:
MoneyGram… will add valuable cross-border remittance capabilities to the Ant Financial ecosystem, serving our more than 630 million users globally.
Both the companies have said that they have made progress towards obtaining the regulatory approvals necessary to complete the transaction, including winning U.S. antitrust clearance. However, it could still face potential political obstacles, with American lawmakers urging the powerful Committee on Foreign Investment in the U.S. (CFIUS) to conduct a “full and thorough” review of the deal.
CFIUS has been a stumbling block for several Chinese deals in the United States. A Euronet deal is likely to be more agreeable to U.S. policymakers amid rising tensions between China and the United States over trade and foreign policy.
Ant Financial had first announced its offer in January to acquire MoneyGram for $880 million as it steps up an international expansion to build on its strength. Thomas H. Lee Partners and certain MoneyGram executives, who collectively own approximately 46 percent of the outstanding voting shares of MoneyGram, entered into agreements with MoneyGram to vote in favor of the transaction, which agreements remain in effect following entry into the Amended Merger Agreement.
Formally known as Zhejiang Ant Small & Micro Financial Services Group Co., Ant Financial serves hundreds of millions of users and provides range of services, including wealth management, insurance, credit checks and consumer loans. It also owns Alipay, the dominant payments platform on China’s largest e-commerce operator.
Ant Financial used to be a part of Jack Ma’s Alibaba Group Holding Ltd., but is now a separately owned business. It was valued at $75 billion by CLSA Ltd. in September and is said to be considering an initial public offering as soon as this year.
