OFX previously known as OzForex says talks to be acquired by Western Union fail, shares slump
Australia’s OzForex Group Ltd said it has terminated talks to be acquired by Western Union after the U.S. money wiring giant failed to submit a binding proposal, sending its shares tumbling nearly 40 percent to an all-time low.
The Australian money transfer services provider said it did not know why Western Union had not made a final offer despite months of due diligence, with Chief Executive Richard Kimber in a conference call describing the collapse of talks as very surprising.
A representative for Western Union was not immediately available for comment.
The collapse in discussions underscores tough times for Australia’s remittances sector which is battling for banking support and faces stiff competition from global rivals such as TransferWise Ltd and World First Pty Ltd.
Last year, Westpac Banking Corp became the last of the country’s major banks to pull out of the remittances sector citing regulatory risks and forcing several smaller players out of business.
Western Union’s indicative cash offer of up to A$3.70 per share late last year had valued OzForex at about A$800 million ($567 million). On Monday, its shares hit a record low of A$1.82, giving it a market cap of just A$435.6 million.
OzForex also cut guidance for underlying earnings before tax, depreciation and amortisation for fiscal year 2016 to a range of A$35 million to A$37 million, compared with previous guidance of A$38.5 million to A$40.5 million.
It reiterated its target to double annual revenue by 2019 to more than A$200 million. ($1 = 1.4120 Australian dollars)
Source: REUTERS – UPDATE 1-OzForex says talks to be acquired by Western Union fail, shares slump
