The Western Union Company denied the report that it was in talks to acquire Moneygram International, its smaller competitor in the remittance industry.
Yesterday, Bloomberg reported that Western Union in early-stage negotiations to acquire Moneygram International based on information from people familiar with the matter. The sources indicated that the discussion between the two companies may fall apart because of potential hurdles.
Western Union has a policy of not commenting on market rumors or speculations. However, it decided to release a statement because of the increased activity of its stock.
“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,” said the company.
Western Union said its no comment policy on market rumors or speculations would remain on a going forward basis.
Western Union and Moneygram dominate the remittance industry in the United States, but the companies are facing pricing competition from other players such as WorldRemit, TransferWise, Xoom.com, PayPal, and Wal-Mart Stores.
Western Union stock performance
The trading of the shares of Western Union was halted on the New York Stock Exchange earlier today. The company’s shares spiked to as much as $22.70 per share around 10:50 in the morning.
The stock trimmed some of its gains, and it is trading $21.85 per share, up by 4.30% at the time of this writing around 2:35 in the afternoon in New York.
Over the past 52 weeks, the shares of Western Union traded between $15.31 and $22.84 per share. The company gained more than 34% over the past year.
Moneygram stock performance
On the other hand, the shares of Moneygram climbed as much as $11 per share, up by 41% today.
Following the statement from Western Union, Moneygram’s stock reduced some of its gains. It is trading around $8.92 per share, still up by 14% at the time of this writing.
Over the past 52 weeks, the shares of Moneygram traded between $7.55 and $15.34 per share. The company lost more than 28% over the past year.
Moneygram was a previous partner of Wal-Mart Stores in providing money transfer service to the retailer’s customers. The remittance company lost its partnership with the retail giant last year. Wal-Mart decided to offer a money transfer service called Walmart 2 Walmart.