OzForex Slumps After Terminating Western Union Takeover Talks

  • Shares fall as much as 41 percent, most since October 2013
  • Company cuts earnings guidance after lower trading activity

OzForex Group Ltd., the provider of online international payment services, slumped the most in more than two years in Sydney trading after it terminated takeover talks with Western Union Co. and cut its earnings guidance.

Shares of OzForex, whose brands include UKForex and USForex, slumped as much as 41 percent, the biggest intraday drop since October 2013. The stock was trading 38 percent lower at A$1.91 as of 12:04 p.m. local time, valuing the company A$452 million ($320 million).

Although exclusive discussions continued for months, Western Union did not submit a binding proposal, the Sydney-based company said in a statement. The company expects underlying earnings before tax, depreciation and amortization of A$35 million to A$37 million in the year to June 30, which is lower than previous guidance, after decreased volatility in foreign-exchange markets trimmed trading activity.

Western Union, based in Englewood, Colorado, in November offered as much as A$888 million in cash for OzForex, or between A$3.50 and A$3.70 a share, subject to completion of due diligence and other conditions. That represented a premium of as much as 42 percent above OzForex’s closing stock price before the offer.

“It is unclear to us what has held Western Union back from making a binding offer,” OzForex Chief Executive Officer Richard Kimber said on a conference call. “It was a surprise to us on Friday when they were unable to proceed.”

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