Shares of MoneyGram International, Inc. (NASDAQ:MGI) are up by about 10% as of 10:30 a.m. EST after the company announced that it would be acquired by an Alibaba (NYSE:BABA) affiliate, Ant Financial Services Group.
The terms call for Ant Financial to pay $13.25 in cash for MoneyGram shares, an 11.5% premium to their closing price on Wednesday. MoneyGram announced that its board of directors approved the deal and that insiders and a private equity group that owns about 46% of the company agreed to vote in favor of the transaction.
MoneyGram expands AliPay's global footprint. The company listed 350,000 agent locations in over 200 countries and territories in its third-quarter presentation. Standalone money transfer businesses have been a hot commodity in recent years. PayPal acquired money transfer company Xoom in 2015.
With MoneyGram shares trading at a mere 2% discount to the offering price, Wall Street is pricing in very little risk that the deal will fall apart. MoneyGram said in a press release that it expects the deal to close sometime in the second half of 2017.