MoneyGram (MGI) Stock Spikes on Western Union Deal Anticipation

NEW YORK (TheStreet) -- MoneyGram International (MGI) shares are up 29.23% to $10.08 in pre-market trading on Wednesday following reports that the global money transfer service provider is in talks to be acquired by rival Western Union (WU).

MoneyGram's stock spiked in after-hours trading on Tuesday after Bloomberg first reported the story, citing sources close to the talks. Antitrust regulations are reportedly the biggest hurdle to a deal getting done, according to sources.

MoneyGram has a 5% market share while Western Union holds a 15% market share, according to the Wall Street Journal, and while the companies are currently the two biggest in the remittance industry, they are facing stiff competition from newer companies like WorldRemit, TransferWise and Walmart Stores  (WMT), according to Bloomberg.

Neither MoneyGram nor Western Union have commented on the reports today.

Western Union shares are also up 5.01% to $22 in pre-market trading today.

TheStreet Ratings team rates MONEYGRAM INTERNATIONAL INC as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:

"We rate MONEYGRAM INTERNATIONAL INC (MGI) a SELL. This is driven by several weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share."

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