U.S. electronic payments company MoneyGram International Inc (MGI.O) has offered to share confidential information with peer Euronet Worldwide Inc (EEFT.O), after the latter made a $1 billion acquisition offer, people familiar with the matter said.
MoneyGram has found that Euronet's cash offer of $15.20 per share, which was unveiled last week, could be expected to result in a superior proposal compared with a deal it agreed to in January to sell itself to China's Ant Financial Services Group for $13.25 a share in cash, the people said on Sunday.
Before Euronet carries out its due diligence on MoneyGram, it will have to agree to the terms of a non-disclosure agreement, the people added. Negotiations on such a confidentiality pact may take several days, the people cautioned.
Euronet is then expected to take about a week going through MoneyGram's books before firming up its offer, the people said. MoneyGram will also receive information from Euronet that will allow it to better assess potential antitrust risks to such a deal, the sources added.
Should MoneyGram declare Euronet's bid superior, Ant Financial will have four business days to decide whether it wants to improve its offer.
The sources asked not to be identified because the deliberations are confidential. Euronet, MoneyGram and Ant Financial declined to comment.
Based in Dallas, MoneyGram is one of the biggest players in the global remittance market. An acquisition would enable Euronet to better compete against digital startups that are transforming the money transfer business.
Euronet has also argued that MoneyGram's focus on large retailers and national post offices, combined with Euronet's strong position with independent agents and its broad set of consumer payment solutions, would create a more valuable business.
While a deal with Euronet would bring cost synergies, a combination of Ant Financial's technological expertise and MoneyGram's brand had been seen as a game-changer for the international payments industry, with scope for more consumers to use online transfer services rather than taking cash to store fronts.
Ant Financial, the financial services affiliate of Alibaba Group Holding Ltd (BABA.N), dominates China's online payment market and has been ramping up investment overseas amid fierce rivalry at home with peers such as Tencent Holdings Ltd's (0700.HK) popular WeChat Pay.
Ant Financial's acquisition of MoneyGram is being reviewed by the Committee on Foreign Investment in the United States, a government panel that scrutinizes deals over potential national security concerns.
MoneyGram will have to pay Ant Financial $30 million as a termination fee if it abandons their deal for another bid.
(This version of the story corrects the name MoneyGram in paragraphs 4 and 8; Alibaba and WeChat in paragraph 10)
(Reporting by Greg Roumeliotis in New York; Editing by Phil Berlowitz and Peter Cooney)