Euronet Worldwide trumps Ant Financial's offer to buy MoneyGram

Wed Mar 15, 2017 1:20am EDT
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By Sruthi Shankar and Anna Irrera

(Reuters) - U.S. electronic payments company Euronet Worldwide Inc (EEFT.O: Quote) launched a $1 billion bid for rival MoneyGram International Inc (MGI.O: Quote) on Tuesday, arguing that its all-American deal would face less regulatory scrutiny than a lower bid by China's Ant Financial Services Group.

Ant Financial, the financial services affiliate of Alibaba Group Holding Ltd (BABA.N: Quote), said it remained committed to its deal.

"MoneyGram and Ant Financial continue to work cooperatively under the terms of our merger agreement, and together, we are making progress on schedule towards obtaining all required regulatory and shareholder approvals," it said in a statement.

MoneyGram said it would "carefully review and consider" the proposal from Euronet.

"MoneyGram remains subject to the terms of the definitive merger agreement with Ant Financial and MoneyGram's board has not changed its recommendation in support of the merger agreement with Ant Financial," it said.

MoneyGram shares surged nearly 25 percent to close at $15.77 on Tuesday, above Euronet's cash offer of $15.20 per share, indicating investors expect a higher bid to materialize. Ant Financial said in January it would acquire Dallas-based MoneyGram for $13.25 per share, or about $880 million, in its first major move to expand its presence overseas.

MoneyGram is one of the biggest players in the global remittance market and a takeover would enable Kansas-based Euronet to better compete against digital startups which are transforming the money transfer business.

"Euronet is the No.4 traditional offline global player via its Ria brand so it's not a surprise they have tried to crash the party," said Michael Kent, the CEO of money transfer business Azimo. "Should be a major synergy play there."   Continued...

A Moneygram logo is seen outside a bank in Vienna, Austria, June 28, 2016. REUTERS/Heinz-Peter Bader