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An offer made by Euronet Worldwide to acquire MoneyGram
International received a cold reception from the US-based global
money transfer specialist, despite at first glance appearing
enticingly generous. The global ATM operator and payment
transaction processor’s share-exchange offer, made on 4 December,
was worth $1.65 billion and valued MoneyGram’s shares at $20 each,
a 43 percent premium to the closing price of MoneyGram shares that
day.
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However, responding to a letter sent by Euronet chairman and CEO
Michael Brown on 4 December to his counterpart at MoneyGram, Philip
W Milne, MoneyGram’s board pointed out that the share offer was, in
fact, worth only $16.75 per MoneyGram share ($1.38 billion)
because Euronet’s share price had fallen subsequent to it making
the offer..
In his letter, Brown talked up what he said was the opportunity to
create “a powerful new player in the international money transfer
business” and noted that “my board and I were disappointed with
your rejection of the compelling business combination proposal we
submitted to you several weeks ago”.
MoneyGram’s board, in its response to Brown’s letter, indicated
that it would be willing to meet with Euronet to discuss its
proposal, subject to the “execution of a mutual confidentiality and
standstill agreement”.
Despite this gesture, it would seem that any chance of an agreement
being struck is dead in the water. MoneyGram has indicated that on
12 December its board “received a communication from Euronet
stating that Euronet is not prepared to pursue discussions with
MoneyGram on that basis”.
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