MoneyGram International Inc (MGI.O) has decided to remain public after talks with private equity firms over a leveraged buyout did not result in an offer in line with its expectations, three people familiar with the matter said this week.
The world's second-largest money transfer company was in final-stage discussions with Carlyle Group LP (CG.O), two of the people said. One of the people added that MoneyGram's board was hoping for an offer in the mid-$20s-per-share range.
The sources requested anonymity because the talks about a sale were confidential. MoneyGram representatives did not respond to requests for comment while Carlyle declined to comment.
MoneyGram shares dropped as much as 11 percent on the news and were trading down 3 percent at $18.99 in late afternoon trading in New York, giving the company a market value of around $1.1 billion.
With 327,000 locations in retailers, post offices and banks in nearly 200 countries and territories, MoneyGram is second only to Western Union Co (WU.N) among money transfer providers.
Bank of America Corp (BAC.N) ran an auction for MoneyGram earlier this summer that also attracted interest from TPG Capital LP, Bain Capital LLC and GTCR LLC, people familiar with the matter previously said.
MoneyGram started as a small money order company in Minneapolis in 1940 and now boasts more than twice the locations of McDonald's Corp (MCD.N), Starbucks Corp (SBUX.O), Subway and Wal-Mart Stores Inc (WMT.N) combined.
The Dallas-based company faced a serious liquidity crunch in 2008 after investing in subprime and other risky asset-backed securities, but it was rescued through a $1.5 billion equity and debt deal clinched with Goldman Sachs Group Inc (GS.N) and private equity firm Thomas H. Lee Partners LP.
MoneyGram staged a comeback and in 2012 reported record sales of $1.34 billion, but its profits suffered as a result of legal expenses incurred in consumer fraud cases involving its agents.
(Reporting by Soyoung Kim, Greg Roumeliotis and Jessica Toonkel in New York; Editing by Bernard Orr)