Ant Financial Said Considering Higher Offer for MoneyGram

Updated on
  • China-based company is confident the deal will go through
  • Rival Euronet claims it will face easier regulatory review

A shop worker places a sign for 'MoneyGram' outside his store on Moore Street in Dublin, Ireland.

Photographer: Paul Thomas/Bloomberg

Billionaire Jack Ma’s Ant Financial is considering whether to make a higher offer for MoneyGram International Inc., according to a person familiar with the negotiations, after the U.S. company said a smaller rival’s bid could be a better deal.

In January, China-based Ant Financial announced its plan to acquire MoneyGram for $13.25 a share in cash, pending regulatory approval. Last week, Euronet Worldwide Inc. swooped in with a $15.20-a-share offer, a proposition that “could reasonably be expected” to result in a superior proposal, Dallas-based MoneyGram said Monday in a statement.

Douglas Feagin, Ant’s head of international operations, said he’s “confident” that the deal will go through. It’s likely that Ant Financial will either counter the bid with a higher offer, or say that it will wait until Euronet finishes carrying out its due diligence before delivering a rival bid, according to a person familiar with the negotiations.

Formerly a part of Alibaba Group Holding Ltd., Ant was valued at $75 billion by securities firm CLSA in September. Euronet has a $4.38 billion market value.

For Gadfly’s take on Ant Financial’s need to buy MoneyGram, click here

Euronet Chief Executive Officer Michael Brown has said that the bid from his Kansas-based company is superior also because it’s more likely to get approved by U.S. regulators.

Analysts have said that the Committee on Foreign Investment in the U.S. (CFIUS), an inter-agency panel that examines acquisitions of companies by foreign investors for national security concerns, could reject the deal, since it would likely be influenced by Trump’s America First policy.

Yet Ant is confident that the deal will succeed. Ant began the approval process with CFIUS immediately after the bid was announced, and the talks have been "going well" and proceeding as usual, according to people familiar with the matter.

If MoneyGram declares Euronet’s bid superior, Ant will have four days to respond. MoneyGram’s shares rose 0.9 percent to $16.43 at the close in New York. They have more than doubled in the past year.

Ant Financial also plans to keep MoneyGram’s headquarters in Dallas, its management team, and its employees. Euronet said in its takeover announcement that it expected the deal with MoneyGram to have cost synergies of about $60 million. U.S. regulators will also have to weigh Alibaba’s commitment to increasing jobs in the U.S., one of Trump’s chief concerns, the people said. In January, Ma met with Trump to discuss how Alibaba could help create 1 million new U.S. jobs.

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