Western Union May Acquire MoneyGram

Update (May 6): Western Union responded to Bloomberg’s report that suggested the company may be buying MoneyGram. Western Union reported that it is not in talks to acquire the money transfer service.

“In view of the high level of market activity in our stock today, Western Union states that current news reports indicating that our company is in discussions to acquire MoneyGram International Inc. are not accurate,” the company said in a statement Wednesday, according to Bloomberg.

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MoneyGram posted a less than stellar quarter last week (May 1) when the company reported that revenue was down 12 percent, year over year, and transaction growth rate was flat. The company also posted a $72 million profit loss in Q1.

Now, however, better days may be ahead for the money transfer service as its rival, Western Union, might be in the early stages of acquiring MoneyGram, Bloomberg reported yesterday (May 5), citing people said to be close to the matter. While it would help Western Union scoop up one of the smaller services, the company would also have to absorb MoneyGram’s roughly $960 million in debt, according to the reports.

While the deal could still fall through, sources indicated, word of the possible acquisition shot MoneyGram’s shares up Tuesday after market closing. Regulatory hurdles were also cited as another issue that could halt the deal.

MoneyGram has taken a hit since Walmart started its own service, which the remittance service hasn’t seemed to recover from. In 2014’s Q1, before the Walmart service launched, MoneyGram posted a quarterly profit of $39 million. Bloomberg reported that as of yesterday, MoneyGram’s market value was around $415 million.

Neither MoneyGram or Western Union provided Bloomberg with comments on the matter.