Reports of Acquisition Talks Between Western Union and MoneyGram Are ‘Not Accurate’

Western Union confirmed that rumors circulating about a MoneyGram acquisition were misleading.

Hints about the deal first surfaced on Bloomberg, where individuals closely linked with the companies involved were cited.

In anticipation of the agreement, MoneyGram stocks soared 32 percent at $10.30 per share after the news went live.

Known for its strict no comment policies, Western Union was forced to release the following statement due to increased activity of its stocks:

“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.”

Many were of the view that the acquisition talks were connected with MoneyGram’s deteriorating performance in the industry. In 2014, the global remittance business lost Wal-Mart as one of its most active clients.

“Our transactions improved in the band where we changed pricing, that is, those over $200, but the overall improvement was somewhat muted by transaction decline in the less than $50 band at Walmart, however, that band is growing elsewhere,” said MoneyGram CEO Pamela Patsley.

In addition to losing a key partnership, competition from other money transfer service establishments, such as WorldRemit, PayPal, and TransferWise, have stifled MoneyGram’s growth.

Based on its annual filing, the company, which is controlled by Thomas H. Lee and Goldman Sachs, currently holds $963.5 million in long-term debt. Furthermore, its net income fell from $39.00 million to -$72.00 million over the span of one year in the same quarter, marking a staggering 284.6 percent decrease.

On the other hand, Western Union has been making consistent gains despite the sudden shifts in the sector. With a 15 percent market share, the leading payments business is reportedly worth over $11 billion.