Investors Reportedly Anxious as Deadline for MoneyGram Sale Nears
Investors are reportedly feeling uncertain about MoneyGram as a deadline nears for its planned sale.
The company’s stock dipped 2.4% Wednesday (April 26) in a move attributed to investors waiting for an update on the sale of MoneyGram to venture capital firm Madison Dearborn Partners (MDP) and the approach of a termination deadline May 14, Seeking Alpha reported Wednesday.
The planned sale needs to be approved by regulators in India, and Wednesday’s decline in the stock price may be due in part to investor unease after Microsoft’s planned acquisition of Activision was blocked by regulators in the United Kingdom, according to the report.
Reached by PYMNTS, a MoneyGram spokesperson said the company could not comment on the report because it is in a quiet period. Madison Dearborn did not immediately reply to PYMNTS' request for comment.
MoneyGram announced in February 2022 that it was set to be acquired by Madison Dearborn Partners for $1.8 billion.
“By partnering with MDP and becoming a private company, we will have greater opportunities to innovate and transform MoneyGram to lead the industry in cross-border payment technology and deliver a more expansive set of digital offerings, while leveraging our global platform for new customers and use cases,” MoneyGram CEO and Chairman Alex Holmes said at the time.
In an update released in January, MoneyGram said one international money transmission regulatory approval remained — that of the Reserve Bank of India — and the closing of the merger transaction with MDP was expected at the end of the first quarter or early in the second quarter.
The company said in the Jan. 30 update that the RBI’s regulatory approval was taking longer than expected because the proposed transaction is one of the first in which a Payment System Operator (PSO) is undergoing a sale since the RBI released a new circular covering approval requirements related to PSOs.
“Once this final international money transmission regulatory approval is obtained, the parties will engage in a financing marketing period which, pursuant to the merger agreement, may last for as long as 15 consecutive business days,” MoneyGram said at the time. “Closing would occur within a matter of days after completing the marketing period.”
“As a result, the parties have agreed to extend the end date beyond February 14, 2023, in accordance with the merger agreement, to May 14, 2023,” the company added.