Alibaba affiliate Ant Financial agrees to buy MoneyGram

Ant Financial Services Group said it would buy US money-transfer company MoneyGram International in a deal valued at about US$880 million (S$1.24 billion).
Ant Financial Services Group said it would buy US money-transfer company MoneyGram International in a deal valued at about US$880 million (S$1.24 billion). PHOTO: REUTERS

BEIJING (REUTERS) - Ant Financial Services Group, an affiliate of Chinese e-commerce firm Alibaba Group Holding , said on Thursday it would buy US money-transfer company MoneyGram International in a deal valued at about US$880 million (S$1.24 billion).

The offer of US$13.25 per share is pitched at a premium of 11.5 per cent to MoneyGram's Wednesday's close of US$11.88.

But the Dallas-based MoneyGram's shares were trading at US$15.50 before the opening bell, up about 31 per cent.

Ant Financial said it would assume or refinance MoneyGram's outstanding debt, which stood at US$937.3 million on a net basis as of Sept. 30, according to a regulatory filing.

MoneyGram's biggest shareholder, Thomas H. Lee Partners, which has a 44.5 per cent stake in the company, has agreed to vote in favour of the deal, the companies said.

MoneyGram has a global network of about 350,000 locations where money transfers are sent and received.

Ant Financial, whose anchor business is Alipay, China's largest online payments service, was spun off from Alibaba in 2011.

Alex Holmes will remain MoneyGram's chief executive and the company will continue to be based in Dallas, the companies said.

Ant Financial has said it plans an initial public offering this year, although a timetable or location for its listing have not been determined. Citi is Ant Financial's financial adviser, while Simpson Thacher & Bartlett is its legal adviser.

MoneyGram is being advised by BofA Merrill Lynch and legal firm Vinson & Elkins.

The Wall Street Journal reported earlier on Thursday that a deal was close.