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April 18, 2017

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Home » Business » Finance

Ant sweetens offer for MoneyGram

Source: Agencies | 00:01 UTC+8 April 18, 2017 | Print Edition

CHINA’S Ant Financial has sweetened its bid for MoneyGram International Inc by over a third, beating a rival offer to gain approval from the US electronic payment firm’s board, although it still faces regulatory hurdles.

Ant’s plans to expand globally with the acquisition of one of the biggest firms in remittances hit a major snag last month when US-based Euronet Worldwide Inc made an unsolicited offer and openly lobbied US lawmakers, saying Ant’s proposal created a national security risk.

The finance affiliate of e-commerce giant Alibaba Group Holding Ltd hiked its bid 36 percent to US$18 per share in cash, valuing MoneyGram at around US$1.2 billion.

The new offer handily beats the US$15.20 per share proposed by Euronet and represents a 9 percent premium to MoneyGram’s last traded share price on Thursday. Euronet declined to comment on Ant’s fresh bid.

MoneyGram’s global remittance channels for sending money overseas would help Ant build a cross-border network after a string of recent investments in Asia. But the deal must first clear the Committee on Foreign Investment in the US, which looks at acquisitions for national security risks.

CFIUS has been a stumbling block for several Chinese deals in the United States.

Analysts said, however, that while CFIUS could certainly hold up any agreement, it wasn’t necessarily a deal-breaker given MoneyGram is likely to push for the deal given the sweetened offer.

“CFIUS may lengthen the process ... I don’t think CFIUS would be a deal killer,” said Jeffrey Sun, Shanghai-based partner with law firm Orrick, Herrington & Sutcliffe.

Euronet has said that Chinese ownership could compromise the relationship between law enforcement and MoneyGram when investigating money laundering and “terrorist financing.”

Ant has sought to allay those fears, reiterating yesterday that any data collected on MoneyGram users in the US will still reside on US-based servers and that MoneyGram will operate as an independent unit.

Ant and MoneyGram said in a joint statement that they have made progress toward obtaining regulatory approvals, including winning US antitrust clearance and are confident the deal will close this year.

The news comes one day after sources said China’s Anbang Insurance Group will let a plan to acquire US annuities and life insurer Fidelity & Guaranty Life for US$1.6 billion lapse, after failing to secure necessary regulatory approvals.

While Anbang’s acquisition had received clearance from CFIUS, it could not get past some US state regulators.

Other analysts noted that Ant was likely to already have Chinese regulators on-side given the high-profile nature of the deal.

“I assume there are reassurances being given,” said Zhi Ying Ng, Singapore-based senior analyst at Forrester.

Dallas-based MoneyGram provides services in 350,000 locations across 200 countries and regions.

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