Euronet surprised the money transfer industry last week by placing a counter offer to Alibaba's Ant Financial for money transfer company Moneygram.
A Surprising and Unexpected Bid
The offer comes at a time when the dust was beginning to settle from Ant Financial's offer. Euronet's unsolicited bid offered 1 billion dollars for the traditional remittance company, a higher bid than that of Ant Financial's for Moneygram in January.
Should Moneygram accept Euronet's bid, Ant Financial's current aim for global expansion could be delayed. In the past several years, Alibaba's subsidiary has expanded globally through acquisitions of foreign money transfer companies, including a move to own 20% of Thailand remittance company, Ascend Money, in 2016. Acquiring Moneygram is an excellent strategy for Alibaba’s Alipay to expand their global coverage and work around international regulations without the traditional regulation hurdles of global expansion.
About Euronet
Euronet believes their offer would be better for Moneygram in the long run. Despite their name, Euronet is based in the United States and is an American company. Euronet is an electronic payments provider, specializing in a range of consumer financial products, such as Automated Teller Machines (ATMs) and point of service (POS) systems, in addition to traditional money transfer services.
Being acquired by an American company would be an easier transition for Moneygram than being acquired by Chinese Ant Financial. Euronet provides money transfer throughout North America, the Caribbean, Europe and Asia Pacific.
Following Euronet's offer, Moneygram shared confidential information with Euronet about the company, suggesting that they are seriously considering Euronet's offer.
Despite being in the final stages of their acquisition by Ant Financial, Moneygram announced on March 20th, 2017, that they can explore their options with Euronet. This is enabled by a clause in their contract with Ant Financial known as a "Company Superior Proposal." According to Moneygram's Board of Directors, this allows the company to engage in discussions with Euronet.
Despite the talks with Euronet, many believe the acquisition by Ant Financial will continue to go through. Only time will tell who the future owner of Moneygram will be.
