Moneygram International Inc (NASDAQ:MGI) has announced that it is willing to give Euronet Worldwide, Inc. (NASDAQ:EEFT) its confidential information after Euronet offered $1 billion acquisition price.
Negotiations between Euronet and MoneyGram
MoneyGram is considering the Euronet offer of $15.20 per share which was launched last week. It is expected that it could lead to a more superior proposal compared to the agreement in had entered with Ant Financial Services Group an affiliate of Alibaba Group Holding Ltd (NYSE:BABA) in January. The companies had agreed to a $13.25 per share in cash.
Negotiations between MoneyGram and Euronet could take a couple of days. However, before Euronet can carry out due diligence on MoneyGram, it has to sign a statement of terms of non-disclosure agreement.
After that, it is expected to review the books of MoneyGram prior to affirming its offer. This will take about a week. MoneyGram will also require information from Euronet which will allow it to assess any potential antitrust risks related to such an agreement.
What happens to Ant Financial?
In the circumstances that MoneyGram, confirms Euronet bid as superior, Ant Financial will have to decide if they want to improve their offer in four business days. The negotiations are top secret and the three companies declined to make any comments.
MoneyGram is one of the biggest money remittance players in the Global market. In the event that Euronet manages an acquisition, it will put it in a better level to compete with the digital start ups which are bringing in transformations in the money transfer trade.
It has argued that if MoneyGram’s main target of national post offices and large retailers is combined with its wide range of consumer payment solutions, would lead to better performing business. This merger results to a cost synergy for the companies.
Ant Financial deal
Ant Financial comes with technological expertise which when merged with MoneyGram’s brand had been viewed as a game-changer in the international payments business. It was expected to broaden the ability of consumers to adopt online transfers instead of taking the money to store fronts.
The acquisition deal is under review by Foreign Investment Committee in the U.S. which reviews deals for any national security concerns. If the deal does not go through, MoneyGram will have to compensate Ant Financial with $30 million for terminating the deal.