Western Union In Early-stage Talks To Buy MoneyGram : Bloomberg

(RTTNews) - Western Union Co. (WU) is in early-stage talks to acquire smaller rival MoneyGram International Inc. (MGI) as both companies contend with stiff competition from upstart money-transfer companies, the Bloomberg reported, citing people familiar with the matter. MoneyGram shares increased about 38 percent in after-hours trading.

MoneyGram had a market value of just $415 million as of Tuesday's close, though in an acquisition Western Union would also have to take on about $960 million of debt. Talks may still fall apart, the report said.

One potential hurdle is whether regulators would block the deal on antitrust grounds. Winning approval would have been less feasible several years ago before the new competitors fragmented the once heavily consolidated remittance industry, the report said.

WU closed Tuesday trading at $20.95, down $0.23 or 1.09%. But, in after hours, the stock gained $0.05 or 0.24%.

MGI closed Tuesday trading at $7.80, down $0.25 or 3.11%. However, in after hours, the stock gained $2.95 or 37.82%.