Euronet Says It Made Bid for Moneygram
(12-13) 05:22 PST LEAWOOD, Kan. (AP) —
Automated teller machine operator Euronet Worldwide Inc. disclosed Thursday it had proposed to pay about $1.65 billion in stock for MoneyGram International Inc., but said the Minneapolis-based money transfer company has rejected its overture.
Euronet, based in Leawood, said it made the proposal in a letter to the board of MoneyGram on Dec. 4. It offered to pay 0.6179 of a common share for each share of MoneyGram in a deal that would give MoneyGram shareholders about a 46 percent stake in the combined company.
Based on the $32.37 closing price of Euronet shares on Dec. 4, the deal is valued at about $20 per share, or $1.65 billion, representing a 43 percent premium to MoneyGram’s $14.01 closing stock price that day.
Moneygram shares closed at $14.90 on Wednesday, while Euronet shares ended at $32.57.
In the letter, Euronet Chairman and Chief Executive Michael J. Brown said he was “disappointed” MoneyGram has rejected its takeover overtures.
“Your refusal to discuss with us the merits of our proposal is not in the best interest of your shareholders,” Brown wrote. “We believe MoneyGram is an attractive business, and a combination with Euronet would create a powerful new player in the international money transfer business that would deliver substantial immediate and long-term value for the shareholders of both companies.”
Brown said Euronet has enhanced its bid to allow MoneyGram’s shareholders to “participate even more substantially in the combined business.” He said Euronet also is willing to make interim financing available to MoneyGram to assist with a cash infusion into its investment portfolio.
“We have more than $250 million of cash in the bank, and additional funds available from our existing financing arrangements, and we are prepared to move quickly to put in place an interim financing arrangement if you so desire,” Brown added.
Under terms of Euronet’s offer, MoneyGram shareholders would own about 46 percent of the combined company, which would include approximately 205,000 money transfer agent locations, 370,000 top-up locations, 10,500 ATMs and more than 80 international banking relationships.
Euronet expects the deal would add to 2008 cash earnings per share on a double-digit basis. The company reported fiscal 2006 earnings of $46.3 million and sales of $629.2 million.
MoneyGram, which sells cash transfers and money orders at more than 100,000 global locations, reported fiscal 2006 net income of $124.1 million and sales of $595.9 million. The stock has fallen from a 52-week high last December of $32.24 to reach a year-low of $13.69 last month.
