M&A Deal: MoneyGram and Ant Financial Enter the Amended Merger Agreement
- Money Transfers
- 17.04.2017 07:45 am
Today MoneyGram and Ant Financial Services Group today reported that the companies have entered into an amendment to the definitive agreement under which MoneyGram will merge with Ant Financial. Pursuant to the amendment, Ant Financial increased the offer price to acquire all of the outstanding shares of MoneyGram from $13.25 per share to $18.00 per share in cash. The MoneyGram board of directors has unanimously approved the Amended Merger Agreement.
The offer price of $18.00 per share provides approximately $320 million in additional cash consideration to MoneyGram stockholders from the prior agreement. The per share consideration represents a premium of approximately 64 percent to MoneyGram's volume weighted average share price over the prior three month period ended January 25, 2017, the day prior to the original transaction announced with Ant Financial. The transaction is valued at approximately $1,204 million for all of MoneyGram's common and preferred shares on a fully diluted basis. Ant Financial will assume or refinance MoneyGram's outstanding debt.
Pamela Patsley, Executive Chairman of MoneyGram, said, "Throughout this process, our board of directors has remained laser-focused on maximizing value for MoneyGram stockholders, while taking into account price, the ability to complete a transaction and other important considerations. We are pleased to offer even more value to our stockholders through the amendment of our merger agreement with Ant Financial. We continue to be excited about the transaction, which we are confident will provide substantial benefits to all of our stakeholders, including stockholders, customers, agents and employees."
Alex Holmes, Chief Executive Officer of MoneyGram, added, "As I have stated previously, we believe this transaction will significantly benefit consumers throughout the world who depend on innovative and reliable financial connections to friends and family. We share Ant Financial's commitment to successfully completing the transaction, which will allow us to grow our business, making money transfers easier for customers and providing a wider selection of services for the agents who serve them around the world."
Doug Feagin, President of Ant Financial International, said, "We look forward to joining forces with MoneyGram, which will add valuable cross-border remittance capabilities to the Ant Financial ecosystem, serving our more than 630 million users globally. Over the past few months, we have enjoyed working closely with the MoneyGram team and remain committed to our plans to invest further in the MoneyGram business. We plan to grow the U.S.-based team and create even greater opportunities for the MoneyGram community as we pursue our shared vision of global inclusive finance in an increasingly digital era."
Mr. Feagin continued, "We are fully committed to maintaining the MoneyGram brand that has earned the trust of millions of customers. As part of Ant Financial, MoneyGram will have access to resources to further enhance its technology, systems and anti-money laundering and compliance programs."
Following the completion of the transaction, MoneyGram will operate as an independent subsidiary of Ant Financial and retain its brand, management team, IT infrastructure and headquarters in Dallas, Texas. All of MoneyGram's current procedures and protections related to data security and personally identifiable information will remain intact.
MoneyGram and Ant Financial have already made significant progress towards obtaining the regulatory approvals necessary to complete the transaction, including obtaining antitrust clearance in the United States and filing for certain state licensing approvals. The transaction is subject to the approval of MoneyGram stockholders, obtaining remaining regulatory approvals, including the clearance of the transaction by the Committee on Foreign Investment in the United States, and other customary closing conditions. The transaction continues to be expected to close in the second half of 2017. The transaction is not subject to any financing conditions.
MoneyGram stockholders of record as of April 7, 2017 will be asked to vote on the Amended Merger Agreement at a special meeting of the stockholders of MoneyGram scheduled for May 16, 2017. Thomas H. Lee Partners and certain MoneyGram executives who collectively own approximately 46 percent of the outstanding voting shares of MoneyGram previously entered into agreements with MoneyGram to vote in favor of the transaction, which agreements remain in effect following entry into the Amended Merger Agreement. The MoneyGram board of directors recommends that MoneyGram stockholders vote "for" the Amended Merger Agreement at the special meeting.
On April 14, 2017, MoneyGram received a binding offer from Euronet Worldwide, Inc. ("Euronet") (NASDAQ: EEFT) to acquire all of the outstanding shares of MoneyGram Common Stock and Preferred Stock (on an as-converted basis) for $15.20 per share in cash. Upon receipt of Ant Financial's increased offer on April 15, 2017, MoneyGram's board of directors, after careful review and consideration in consultation with its outside legal and financial advisors, compared the relative merits of the increased offer reflected in the Amended Merger Agreement with Ant Financial to the binding offer from Euronet and unanimously determined that the Euronet proposal was not superior to the Amended Merger Agreement and that entering into the Amended Merger Agreement was in the best interests of MoneyGram stockholders.