Written by StockNews.com
China-based Ant Financial, an online payments specialist founded by Alibaba Group Holding Ltd. (NYSE:BABA), has substantially upped its takeover offer to U.S.-based money transfer giant MoneyGram International Inc. (NASDAQ:MGI).
Ant boosted its bid for MoneyGram by 36% from its prior offer, to $18 per share in cash, or $1.2 billion. That’s up from $13.25 per share previously…[and that] has apparently beaten out all other bidders for MoneyGram.
As Reuters notes, [however,] the acquisition still faces big regulatory hurdles:
A successful deal would be Ant’s first major acquisition in a developed market but first it needs to clear regulatory reviews, including one by the Committee on Foreign Investment (CFIUS), a U.S. inter-agency panel that looks at acquisitions for national security risks.
CFIUS has been a stumbling block for several Chinese deals in the United States and a deal with Euronet is likely to be more agreeable to U.S. policymakers amid rising tensions between China and the United States over trade and foreign policy.
Regulators are concerned that moving MoneyGram’s ownership overseas — far away from their watchful gaze — could pave the way for more money laundering and terrorist funding. To assuage those concerns, Ant Financial noted that MoneyGram data collected on U.S. users will continue to reside on U.S. servers.
Year-to-date, BABA has gained 25.51%, versus a 4.47% rise in the benchmark S&P 500 index during the same period.
BABA currently has a StockNews.com POWR Rating of A (Strong Buy), and is ranked #1 of 61 stocks in the China category.
