Jack's Back. With More Money, Too

At last, Ant Financial has found another $320 million to bid for MoneyGram.
At Closing, April 24th
75.30 USD
At Closing, April 24th
173.09 USD

Finally, Jack Ma has offered a price for MoneyGram International Inc. that he should have three months ago.

Late Sunday in the U.S., Ant Financial Group, an affiliate of Alibaba Group Holding Ltd., announced it would increase its bid by 36 percent to $18 per share.

Four weeks ago I predicted this would happen, and political pressure from rival bidder Euronet Worldwide Inc., as well as U.S. lawmakers, forced the Alibaba founder's hand.

This should be a knock-out blow to Euronet. However a cornered dog growls the loudest, so expect the Kansas-based, Hungary-founded payments provider to turn up its lobbying efforts that proclaim such a deal would be a threat to U.S. national security.

Moving On Up

Ant Financial has increased its bid for MoneyGram by 36 percent versus its January $13.25 offer

Source: MoneyGram SEC filing dated April 5, 2017; company statements

If Euronet's lucky, the issue will appear on the radar of President Donald Trump, who's the only person with power to kill the transaction over such concerns. While the Committee on Foreign Investment in the U.S. reviews and makes recommendations on foreign takeovers, POTUS is the ultimate decider.

But for Euronet, putting all its eggs in the Trump basket would be a risk. The president just let China off the hook over currency manipulation because Asia's biggest economy is helping him deal with North Korea. The alternative is for Euronet to meet and beat Ant's latest offer, a scenario that should scare shareholders (although that doesn't mean Euronet won't do it).

Not So Great Expectations

At $18 per share, Ant Financial's increased bid for MoneyGram is higher than what traders had been betting

Source: Bloomberg

And there's no point appealing directly to MoneyGram investors in the hope they'd vote in favor of patriotism. According to data compiled by Bloomberg, MoneyGram is majority owned by private equity firm Thomas H Lee Partners LP and hedge fund Abrams Capital Management LP.

Perhaps a low-ball opening bid was part of Ma's plan to smoke out other offers. Or perhaps the Chinese billionaire thought he could get MoneyGram for a song. Either way, the offer that's on the table now looks far more credible.

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

    To contact the author of this story:
    Tim Culpan in Taipei at

    To contact the editor responsible for this story:
    Katrina Nicholas at

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