U.S. money wiring giant Western Union Co said it made an informal offer to buy Australian online rival OzForex Group Ltd for A$888 million ($632 million), aiming to boost its access to one of the world’s biggest cash transfer markets. The proposal, confirmed by both companies on Thursday, continues a wave of in-bound M&A activity in Australia this year after a 5 percent decline on the share market and a 13 percent drop in the Australian dollar against the greenback made companies cheap for offshore buyers. The proposal comes two days after the 164-year-old Western Union said it would offer money transfer service on WeChat, the messaging app owned by Chinese internet company Tencent Holdings Ltd. A deal with Australia’s OzForex will expand online reach for the former telegram service from Colorado into a market that sends more money to developing countries than any European country, according to the International Fund for Agricultural Development, a U.N. agency. “Western Union has acknowledged a need to adapt to changing industry trends if it is to maintain its dominant position and strong profitability,” Morningstar analysts wrote in a research note, forecasting that the deal would grow the U.S. firm’s online revenue by 40 percent. For OzForex, the indicative cash offer of up to A$3.70 per share represents a near doubling of its value since listing at A$2.00 per share just two years ago. The stock jumped 33 percent to A$3.46 on Thursday, its highest intraday level ever. So far in 2015, Australia has signed $50 billion worth of in-bound deals, up a third from last year and the most since 2011, according to Thomson Reuters data. In a statement, OzForex said it had hired Macquarie Group Ltd and was evaluating Western Union’s offer. Read more at Reutershttp://www.reuters.com/article/2015/11/19/ozforex-group-ma-western-union-idUSL3N13D5QD20151119#AQ5VzeqrgKlcCKIv.99
Source: Economic TimesWestern Union makes $630 mln proposal for smaller Australian online rival
Industry: Financial services 2015-11-19
