Ant Financial target, MoneyGram, receives competing bid
(16 March 2017 – Global) US electronic payments company Euronet Worldwide Inc launched a US$1 billion (A$1.3 billion) bid for rival MoneyGram International Inc.
The firm says its all-American deal would face less regulatory scrutiny than a lower bid by China's Ant Financial Services Group, who said it “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.
The new offer boosted MoneyGram shares by nearly 25 percent and above the cash offer, indicating investors expect a higher bid to materialise.
Euronet has four money transfer businesses, including Ria, IME, HiFX and XE. Euronet focuses more on independent agents, while MoneyGram targets large retailers and national post offices.
MoneyGram, alongside Western Union, has dominated the global money transfer industry with its large network of retail locations. It has about 350,000 outlets in retail shops, post offices and banks in nearly 200 countries and territories.
A Euronet deal would not require clearance by the Committee on Foreign Investment in the United States (CFIUS), a U.S. inter-agency panel that reviews foreign acquisitions of domestic assets for national security concerns.
The CFIUS has been a stumbling block for several Chinese deals in the United States and was considered a big hurdle for Ant Financial. A Euronet deal is likely to be more agreeable to U.S. policymakers against a backdrop of rising tensions between China and the United States over trade and foreign policy.
On March 10, some 20 organistions sent a letter to US Treasury Secretary Steven Mnuchin, who chairs CFIUS, and other officials that warned against allowing Ant Financial to buy MoneyGram.
In the letter, the wrote: "There can be little doubt that if China is allowed to dominate the global payments market, it will use the information, technology, intelligence and economic power it obtains to the detriment of America’s economic and national security."