$1.19 Billion Winning Bid for Western Union Unit 144-Year-Old Financial Arm Sold

Article excerpt

First Financial Management Corp. won a bankruptcy court-supervised auction Monday of 144-year-old Western Union Financial Services by offering to pay $1.193 billion in cash for the New Valley Corp. unit.

After five rounds of bidding, Atlanta-based First Financial beat offers from leveraged buy-out firm Forstmann Little & Co. and First Data Corp.

It also topped a last-minute proposal at the U.S. Bankruptcy Court in Newark, N.J., by a group of New Valley bond and equity holders led by Gotham Capital and Cerebus Partners. The two proposed reorganizing the company in a transaction it valued at $1.364 billion.

For its money, First Financial will get a company that controls 90 percent of the worldwide money-transfer business, including the wiring of money and providing money orders for the estimated 20 percent of U.S. households that don't have bank accounts.

New Valley's management and largest bondholder were happy with the outcome, which allows its creditors to be repaid the full $800 million in principal and interest up to Nov. 15, 1991, they are owed.

The offer doesn't include the assumption of $266 million of unfunded pension liabilities covering 16,000 Western Union workers, including 10,000 retirees. …