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December 15, 1987

WESTERN UNION WINS SHAREHOLDER APPROVAL FOR FIRST STAGE IN RESTRUCTURING PLAN

By CBR Staff Writer

Western Union Corp’s confidence that shareholders would approve the merger of its Western Union Telegraph unit with the Upper Saddle River, New Jersey parent (CI No 831) was not misplaced, and the company has the votes. It now needs a similar response from holders of its debt to convert into two new classes of preference share. The exchange offer was due to close at midnight New York time last night. The final major step in its restructuring plan involves the raising of $500m by way of an issue of junk bonds, and despite the current market climate, Drexel Burnham Lambert Inc – Western Union’s investment banker as well as a shareholder – is highly confident that it can raise the money. The $500m is needed to acquire ITT Corp’s international telex business, to repay Western Union’s banks at a discount, and for working capital, leaving the company under the control of a New York group led by investor Bennett LeBow. Separately, Western Union has responded to CitiCorp’s $35m suit alleging that it sought to discourage money transfer agents from using CitiCorp’s start-up rival service by launching a $1,000m countersuit against the New York bank. Western Union alleges that CitiCorp conspired to replace Western Union in the money transfer business by pressing it to sell its service to CitiCorp at an unreasonably low price and then to drive Western Union out of the business through unfair means, and of misappropriating Western Union’s money transfer agents and customers.

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