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China-based Ant Financial Services Group, which has a deal to buy MoneyGram International Inc. for $880 million, on Wednesday fired back at Euronet Worldwide Inc. as the two firms fight for the No. 2 U.S.-based wire-transfer provider.
Euronet last month submitted an unsolicited $1 billion bid for MoneyGram and has said that in addition to offering MoneyGram shareholders more money, its offer faces less political risk and fewer regulatory hurdles than Ant’s because Euronet is a U.S. company based in Leawood, Kan. A federal panel must review the Ant bid, and some members of Congress have expressed reservations about the pending deal.
“Euronet has sought to create phantom national-security arguments and encouraged political interference in a commercial transaction,” Doug Feagin, president of Ant Financial International, said in a news release. “A closer examination of Euronet’s self-serving claims demonstrates that its hostile bid for MoneyGram does nothing to advance American interests.”
Ant Financial’s release, headlined “Setting the Record Straight on Euronet and Its Hostile Proposal for MoneyGram,” portrays Euronet as mostly a foreign company. Euronet was founded in Hungary and still is heavily concentrated in Eastern Europe, with 85% of its assets outside the United States, according to Ant’s statement. Ant also says most of Euronet’s servers and data centers with customer information are outside the United States. The statement also faults Euronet for a data breach and for reportedly paying little in U.S. taxes.
In a statement to Digital Transactions News, a Euronet spokesperson said “Ant Financial is presenting false information in an attempt to distract attention from the real issues that will directly determine its ability to pursue a transaction with MoneyGram.” The spokesperson said the “location of servers is completely irrelevant to the security of data.” Regarding taxes, the spokesperson said “the company pays tax on revenue where it is earned” and that Euronet “has brought back more than $750 million in foreign profits to pay down its debt in the U.S.”
One thing Ant Financial hasn’t done yet is raise its bid. Dallas-based MoneyGram, which has agreed to the Ant buyout, is recommending that its stockholders approve the Ant proposal at a special shareholder meeting set for May 16. But as part of its fiduciary duties, MoneyGram’s board of directors has agreed to review Ant’s offer to ascertain if it is a “company superior proposal.”
“Should our board of directors determine that the Euronet proposal is not a company superior proposal, it will take such steps as are necessary to allow stockholders sufficient time to make an informed decision regarding whether to approve and adopt the [Ant] merger agreement in light of such new information,” the proxy says. “These steps may include, if appropriate, adjourning or postponing the special meeting.”
Under Ant Financial’s plan, MoneyGram will retain its brand and Dallas headquarters.
