MoneyGram (NASDAQ:MGI) is in the news Tuesday following reports that Western Union (NYSE:WU) may be looking to buy the money transfer service.
Bloomberg was the first to report on the possible deal between the two companies. The publication spoke with an unnamed source that says talks are currently underway. However, that source warns that no deal may come from these discussions.
The anonymous source of this news also doesn’t reveal any of the finer details of the possible deal between MoneyGram and Western Union. That means we don’t know how much WU may be willing to spend on MGI.
What’s interesting to note is that the source says Western Union may move forward even without striking a deal with MoneyGram. If true, that means the money transfer service could become the target of a hostile takeover.
Talk of a possible deal between the two money transfer companies has been good news for both MGO and WU stock. The initial reports came out last night and saw MGI and WU increase during after-hours trading. Those increases are continuing today with investors boosting the stocks higher.
It’s worth taking note that both stocks are on the rise today. Typically, the company being acquired’s stock increases while the buyer’s stock drops. Since that hasn’t happened, it could be a sign that shareholders from both sides are in favor of the deal.
MGI stock was up 26.3% as of Tuesday afternoon and is up 25.7% since the start of the year. WU stock was up 11.3% at the same time but is down 20.9% year-to-date.
As of this writing, William White did not hold a position in any of the aforementioned securities.
