Shares of the cross-border payments company MoneyGram International (MGI) traded nearly 9% higher in the final hour of trading for no obvious reason, although the move is likely tied to acquisition rumors.
Last week, Reuters, citing anonymous sources, reported that MoneyGram had now received multiple offers to acquire the company. The report said that there had been three offers from the private equity firms Madison Dearborn Partners, Siris Capital Group, and Advent International Corp.
Madison has reportedly offered $10.50 per share for MoneyGram, which currently trades at about $9.60 per share. But no deal is certain, according to the anonymous sources.
This isn't the first time rumors have swirled over the large money transfer company being a takeout target. In June 2020, media outlets reported that MoneyGram's main rival, Western Union, sought to buy the company.
MoneyGram has faced many challenges in recent years including high levels of debt, competition from other payments companies in the market like PayPal Holdings and Remitly Global, and the pandemic, which previously put a dent in global transfer volume.
MoneyGram has made moves to modernize and digitize its payment products and services, but the stock is still a mere shadow of what it was before the Great Recession.
While the company appears to be desirable among suitors and certainly could get bought, we have seen these rumors before turn into nothing, so I wouldn't call a deal a guarantee. Management may not be happy with the price being offered or would like to continue to try and turn things around.