American money transfer firm Western Union has reportedly made an offer for fellow remittance company MoneyGram International.
While Western Union has made a takeover offer, they could still opt out of the deal, according to a report from Bloomberg which cites a person familiar with the matter.
MoneyGram has seen its usage decline recently as more people move towards online payment services, the report stated. However, quarterly reports from MoneyGram state the business has actually been seeing strong growth.
In the first quarter of 2020, the company saw the number of transactions being made through its platform grow by 60% year-over-year. In 2019, Furthermore, the company’s international transactions has witnessed a 116% 116% year-over-year growth and revenue growth of 70% February year-to-date.
Following the news of the potential takeover, stock prices rose for both MoneyGram and Western Union, the Bloomberg article states.
The company claims it rose as high as 74% in late trading on Monday and the stock price closed up 6.2% to $2.59. This gives the business a valuation of around $164m.
Western Union saw its stock go up by 3.5% to $20.71 making its valuation around $8.5bn, the article claims.
Earlier in the year, MoneyGram launched a new referral programme where users can get discounts for referring new customers.
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