Underperforming Western Union (WU) May Attract Activist Investors

Western Union (NYSE: WU) shares are positive following speculation that the company might be target of a takeover.

Bloomberg noted earlier that activist investors could see an opportunity to shake up Western Union's board given that the stock trades at levels not seens since 2006. That performance includes about $6 billion in buybacks.

All of Western Union's directors will face re-election in 2015.

Activist investors could move buyback funds into a dividend, or work to spin-off Western Union's business-to-business division, which is a non-core unit.

Revenue growth at Western Union has vastly slow since its spin-off from First Data in 2006; gains are expected at 3.5 percent next year, from 10 percent growth following its separation. The company generated about $724 million of free cash flow in the first three-quarters of 2014, with the company returning about $645 million of that back to investors via dividends and buybacks.

Western Union is up 0.7 percent Wednesday.

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