Euronet Worldwide (EEFT) issued a statement early Thursday confirming it delivered an unsolicited all-stock acquisition offer to the Board of Directors of MoneyGram International (MGI) on Dec. 4. The proposed transaction would be tax-free and based on a fixed exchange ratio of 0.6179 shares per MoneyGram share, which using Euronet's closing price on Dec. 4, values MoneyGram at approximately $1.65B, or $20.00/share -- a premium of around 43% to MoneyGram's same-day close. Euronet's letter to MoneyGram emphasized "substantial immediate and long-term value for shareholders of both companies." Specifically, Euronet sees enhanced competitiveness, expanded global reach, growth opportunities in key emerging markets and the ability to generate double-digit accretion and delivery significant synergies.
Despite the 40-plus percent premium, the offer is well below MoneyGram's 52-week high of $32.24. MoneyGram's shares are off by around 50% since summer, because of the company's ill-timed expansion into mortgage-backed securities. Shares of Euronet gained 3.1% to $32.57 on Wednesday. MoneyGram rose 0.1% to $14.90. Western Union (WU), +0.7% to $23.27, is the dominant player in global money transfer services with 16% market share, compared to Euronet/MoneyGram's combined market share of only 6%. Shares of all three were untraded as of 07:20.Get Wall Street Breakfast by email -- it's free and takes only seconds to sign up.