When it comes to making a deal, sometimes it's comforting to know that you have competing bidders even though your stock may take a beating. Just ask MoneyGram International Inc. [MGI]. The company's stock took a major dip in midday trading Thursday, down almost 15% following news that Euronet Worldwide Inc. withdrew its offer, but luckily it had another firm bidder. The decline mirrored Thursday's weak markets as investors also digested Federal Reserve Chairman Ben Bernake's concerns on the economy. The Dow fell 26.67, or 1.00% to 12, 567.61 while the Nasdaq decreased 20.67, or .88% to 2,333.11.
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A consortium of PE firms that include Thomas H. Lee Partners LP and Goldman Sachs Group Inc. will still acquire MoneyGram, which dropped .65, or 14.16% to $3.94 following the announcement that Euronet dropped its competing $1.65 billion stock bid, blaming the "current debt and equity markets." Specifically, Euronet pointed to the drastic fall in MoneyGram's stock price. The company had spent $20 million in MoneyGram stock to try and buy it, and the value dropped to $6.1 million as of Feb. 19.
Meanwhile, other Deal Stocks in the red include Children's Place Retail Stores Inc. [PLCE]. The Secaucus, N.J.-based children's clothing chain dipped following news of a class-action lawsuit against the company and its board, alleging former CEO Ezra Dabah's $24 per share proposal is unfair.
Lastly, XM Satellite Radio Holdings Inc. [XM] dropped following news that its fourth-quarter loss narrowed due to a 20% jump in revenue. The company's merger approval process with Sirius Satellite Radio Inc. [SIRI] is still ongoing, pushing the one-year mark. - Gerald Magpily
