Ant Financial Sweetens the MoneyGram Bid to $1.2 Billion

Ant Financial, which was a part of Jack Ma’s Alibaba Group Holding Ltd. but now is a separate entity valued at $75 billion, has raised its agreed offer by 36 percent for MoneyGram International Inc. It has revised its $880 million offer to counter the competing offer by Euronet Worldwide.

The Texas-based MoneyGram is in the limelight with Chinese Ant Financial trying to woo it by revising the earlier offer by 36% and both the US politicians and rival bidder flagging the political risks. The American lawmakers are pointing towards the political risks that can arise by selling Ant Financial to the Chinese entity and hence want that the Committee on the Foreign Investment in the U.S (CFIUS) to conduct a thorough review.

Steven Mnuchin, the Treasury Secretary of the US, is the chairman of the panel. President Trump has a hard stance on China and has accused it from time to time. Hence, it is quite probable that the White House may stop the deal from materializing.  

An analyst at New Street Research, Kirk Boodry said, “You have two issues; what are MoneyGram shareholders going to receive? And that’s what Ant Financial is addressing with a revised bid. Politics is the other issue that really stands out here and Chinese companies have struggled to get deals done in the U.S.”

Ant’s international president, Doug Feagin said that with the revised offer we have clarified our intention of closing the deal. He said, “We wanted to speak with conviction that this is something strategic for us. We intend to move to get closed and to be successful here.” The company is looking forward to closing the deal in the latter part of 2017 if all goes well. So far, the regulatory approval process seems to be constructive as per Feagin, but no specific time frame can be given for the completion of the same.

Alex Holmes, the MoneyGram Chief Executive Officer said that the company received Euronet’s binding bid on Friday and now they are considering both the offers. He said, “It made a lot of sense to us at $13.25 and certainly it makes the same amount of sense, if not more now, for shareholders now at $18. If Euronet chooses to continue forward or make another offer it’s really entirely up to them.”

Ant Financial has plans to acquire MoneyGram as it will help it in anchoring its global expansion. In January this year, it has made its plans public by offering a deal of $880 million to MoneyGram.

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