MoneyGram International, Inc. (NYSE:MGI) confirmed today that it has received an unsolicited letter from Euronet Worldwide (NASDAQ:EEFT), proposing a business combination between MoneyGram and Euronet in which MoneyGram shareholders would receive shares of Euronet common stock at a fixed exchange ratio of 0.6179 shares of Euronet common stock in exchange for each MoneyGram share.
This ratio would represent approximately $20.00 per MoneyGram share based on the closing price of Euronet shares on the December 4 date of that letter but would represent approximately $16.75 per MoneyGram share as of the trading price of Euronet shares at noon ET today. The proposal was explicitly conditioned on Euronet having had the ability to conduct a due diligence review, and suggested that the two companies enter into a confidentiality agreement so that each could conduct due diligence and discussions could begin.
After review of the letter with the MoneyGram board, MoneyGram sent a letter to Euronet on December 11, 2007 indicating that MoneyGram would be willing to meet to discuss Euronet's proposal, subject to the execution of a mutual confidentiality and standstill agreement. On December 12, 2007, MoneyGram received a communication from Euronet stating that Euronet is not prepared to pursue discussions with MoneyGram on that basis.
As previously announced, during the third quarter of 2007, MoneyGram's Board of Directors authorized hiring JP Morgan to complete a strategic review of MoneyGram's Payment Systems business. The Payment Systems business includes official check outsourcing services, money orders sold through financial institutions and controlled disbursement processing services. The strategic review includes all aspects of the Payment Systems business, including the portfolio strategy and capital implications. While no final determinations have been made as to the strategic review, the Company is currently in discussions with certain potential investors regarding financing alternatives. No assurances can be given that any financing alternative will be agreed upon or consummated.
MoneyGram has not yet concluded its valuation of its securities portfolio as of November 30, 2007. As previously disclosed, MoneyGram's comments regarding its financial results for the full year 2007 are subject to risks including the risk of additional material changes in the market value of securities and/or permanent impairments of portfolio securities. As a result, investors should not expect that MoneyGram's financial results will be consistent with its previously announced 2007 outlook.