MGI - MoneyGram falls as Madison Dearborn sale not expected to close until late in Q2 (update)

2023-05-01 15:00:36 ET

Update 3pm : Adds expert comment.

MoneyGram ( NASDAQ: MGI ) fell 8% after a Friday update the company's planned sale to Madison Dearborn wasn't expected to close until the late in the second quarter.

MoneyGram made the disclosure on Friday in a 10-Q filing . MoneyGram ( MGI ) said in February when it reported its Q4 results that it planned to complete th e sale by the end of Q1/early Q2.

"In light of the timing and factors discussed above, the parties now expect to close the merger late in the second quarter of 2023," MoneyGram said in the 10-Q filing on Friday after the close.

Investors have been waiting any update on the planned sale to Madison Dearborn, which needs approval from regulators in India. M&A investors have become more worried on the deal as a May 14 termination deadline approaches.

Investors are concerned that with the walk deadline nearing, the deal may have to renegotiated and there could potentially be a price cut, Aaron Glick, a merger arb strategist at TD Cowen told Seeking Alpha.  MoneyGram, which had been regularly communicating with Wall Street on the deal, has now gone quiet on the transaction.

"It may not mean anything, but the company has taken a 180 degree turn in their communication on the deal at a most critical time, which has the market concerned," Glick told Seeking Alpha in an interview.

MoneyGram ( MGI ) shares have seesawed in recent weeks as the the May 14 deadline approaches. The stock rose 4.6% on Friday, the most since the deal was announced in February of last year, as speculation circulated among traders that some announcement was expected soon.

MoneyGram ( MGI ) agreed to be sold to Madison Dearborn for $11/share in February of last year.

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