Shares of MoneyGram International Inc. (NASDAQ: MGI) soared on Tuesday following a new acquisition bid from Euronet Worldwide Inc. (NASDAQ: EEFT). The combination of these highly complementary businesses can potentially create a very well-positioned global payments company with a global reach.
Under the terms of the offer, Euronet will pay $15.20 in cash for each share of MoneyGram common stock and MoneyGram preferred stock on an as-converted basis, valuing the company at more than $1 billion, in addition to the assumption of roughly $940 million of MoneyGram’s debt outstanding.
The proposed offer represents a premium of roughly 15% over the Ant Financial Services Group offer and a premium of 28% over the closing price of $11.88 for MoneyGram stock on the final day of trading prior to the transaction announcement on January 26, 2017.
The offer also represents a premium of 38% to MoneyGram’s volume weighted average share price over the three-month period prior to the Ant Financial transaction announcement.
According to Euronet:
The proposal offers stockholders a clear and significantly more certain path to a faster closing with no required review by the Committee on Foreign Investment in the United States (“CFIUS”) and no closing condition related to securing change of control consents covering money transmitter licenses in the jurisdictions in which MoneyGram operates.
For some quick background on Euronet’s money transfer segment: it has grown from just more than $200 million in pro forma revenue to over $800 million, a compound annual growth rate of 16%.
Euronet expects to see cost synergies of approximately $60 million in the second year after this transaction closes.
Shares of MoneyGram were last seen up 23% to $15.63 on Tuesday, with a consensus analyst price target of $9.55 and a 52-week trading range of $5.61 to $16.40.
Euronet traded up 0.8% to $83.60. The consensus price target is $94.40, and a 52-week range is $65.33 to $84.81.