Western Union ends $500 million Intermex takeover over California conditions

Intermex shares fell 7.4% in premarket trading; Western Union rose 2.9%

Western Union terminated its $500 million agreement to acquire International Money Express on Tuesday after California regulators delivered approval conditions the company called unacceptable. Intermex shares fell 7.4% in premarket trading following the announcement, and Western Union said meeting the conditions would have required material changes to its business model and long-term strategy.

Western Union said late Tuesday that California’s Department of Financial Protection & Innovation had delivered “unacceptable” final approval conditions. Accepting them, the company said, would have required material changes to the Denver-based company’s business model, its agent relationships and the execution of its long-term business strategy.

The termination ends an agreement Western Union reached last year to pay $16 a share in cash for Intermex, the cross-border payment company also known as International Money Express. Western Union said it had previously received approvals for the deal from every other jurisdiction.

The abandoned acquisition would have brought the Miami-based Intermex into the Denver-based Western Union, two companies that both operate in cross-border payments.

The deal had been subject to review by California’s regulator, which initially approved it in February before withdrawing that approval in August. The department delivered its final conditions this week, and Western Union responded by ending the transaction rather than accept them.

The Wall Street Journal reported that Intermex shares, already down nearly 60% this year amid doubts about the deal closing, were recently down 7.4% to $6.01 in premarket trading. That price was well below the $9.28 closing price before the deal was unveiled last year, and far below the $16 a share Western Union had agreed to pay.

Western Union’s own shares moved the other way, rising 2.9% to $7.14 in premarket action.

The $500 million agreement struck last year at $16 a share is now over. Western Union’s decision preserved the business model and agent relationships the company said California’s conditions would have changed, and Intermex shareholders are left holding stock that trades far below the announced price.