Leawood-based Euronet has other plans if its bid for MoneyGram ‘doesn’t go’

Leawood-based Euronet Worldwide Inc. failed to advance its bid for rival MoneyGram International on Wednesday and management left open the possibility its effort would falter.

Last week, Ant Financial Services Group raised its offer for MoneyGram, topping a bid that Euronet had made following MoneyGram’s original announcement of a sale to Ant Financial.

Euronet CEO Mike Brown spoke with analysts Wednesday after the company released its earnings report for the first quarter.

He said the company had no update on MoneyGram but then allowed that Euronet’s effort may not succeed. The comment came when an analyst asked whether Euronet had plans for the considerable cash resources it had aimed at acquiring MoneyGram, calling it “powder.”

“This would have taken all of our powder and then some. And if it doesn’t go, we’ll have a lot left,” Brown said.

Euronet has been evaluating other potential acquisitions separate from its bid for MoneyGram and is looking for possible deals in all of its businesses.

Brown added, however, that he believes Euronet’s offer would be the deal most likely to get done and that it would be in the best security interests of the United States. Ant Financial is partly owned by China’s government and its purchase of MoneyGram would require approval by the Committee on Foreign Investment in the United States.

Euronet shares fell $1.37, or 1.6 percent, to close at $83.30 Wednesday.

During the conference call with analysts, Brown downplayed the competitive impact should Ant Financial acquire MoneyGram. He said Ant Financial’s purchase of MoneyGram would give it only a U.S. foothold.

Most money transfers in the United States are handled by many small businesses with the three leaders — Euronet, MoneyGram and Western Union — handling less than 25 percent of transfers, Brown said.

“That leaves 75 percent up for grabs,” he said.

On that front, Wal-Mart, which launched its own money transfer product using Euronet’s RIA Money Transfer business three years ago, announced a price cut Wednesday.

Brown said RIA already had seen strong growth in the Walmart2Walmart transfer business and that growth would accelerate with lower prices and plans to market the service more.

Euronet said it earned $28.1 million, or 51 cents a share, in January, February and March, compared with $29.1 million, or 53 cents a share, a year ago. The recent results included $1.2 million in costs tied to the bid for MoneyGram, and some additional costs will be reported in the second quarter results.

Revenues in the first quarter reached $473.4 million, up 8.1 percent from a year ago.

This story was originally published April 26, 2017 at 11:52 AM with the headline "Leawood-based Euronet has other plans if its bid for MoneyGram ‘doesn’t go’."