On Apr 14, 2017, MoneyGram Inc. MGI received a binding offer from Euronet Worldwide, Inc. EEFT for the acquisition of all the outstanding shares of Common Stock and Preferred Stock of the former for $15.20 per share. However, on Apr 15, 2017, the company received an offer from Ant Financial in which the offer price was increased 35.8% to $18.00 per share. After careful review and consideration, MoneyGram's board of directors, in consultation with its legal and financial advisors, entered into the Amended Merger Agreement with Ant Financial
The transaction is presently subject to the approval of MoneyGram stockholders, as well as other regulatory approvals, including clearance of the deal by the Committee on Foreign Investment in the United States, and other customary closing conditions. Notably, the transaction is not subject to any financing conditions and is expected to be closed in the second half of 2017.
MoneyGram has always been engaged in enhancing shareholders' value. As a result, year to date, the stock has gained nearly 40% where as the Zacks Financial Miscellaneous Services Industry has lost 1.1%.
Coming back, MoneyGram believes that the Amended Merger Agreement will pave the way for not only offering more value to stockholders, but also providing substantial benefits to its customers, agents and employees. The alliance with Ant Financial is expected to facilitate MoneyGram to grow its business further by simplifying money transfer and providing a wider selection of services for the agents operating worldwide.
Ant Financial, on the other hand, expects a rise in valuable cross-border remittance capabilities through its association with MoneyGram. The insurance company, which already serves more than 630 million users globally, eyes further growth. It also intends to create greater opportunities for the MoneyGram community as both companies progress with their shared goal of global inclusive finance amid increasing digitalization. MoneyGram has already earned the trust of millions of customers and joining forces with Ant Financial should help it to capitalize on the brand value and sophisticated technological resources of the latter.
This proposed merger between MoneyGram and Ant Financial is likely to impact the competitive landscape of the industry, which is currently dominated by a few big players. The new entity is likely to pose stiff competition to Western Union Co. WU , a leading market player which commands a premium pricing in many corridors due to its established and globally recognized brand name.
Zacks Rank and Stocks to Consider
MoneyGram presently carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .
Investors can also consider Moody's Corporation MCO . The stock the same Zacks Rank as MoneyGram. It also has delivered positive surprises in each of the last four quarters with an average beat of 3.58%.
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Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Moody's Corporation (MCO): Free Stock Analysis Report Moneygram International, Inc. (MGI): Free Stock Analysis Report Euronet Worldwide, Inc. (EEFT): Free Stock Analysis Report Western Union Company (The) (WU): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research