OFX (ASX:OFX), previously branded OzForex, has terminated discussions with Western Union just two months after the global payment services provider launched an indicative conditional proposal to acquire 100 percent of its shares.

Western Union had proposed a preliminary cash offer that would have brought the takeover target up to $888 million – a near doubling of OFX’s float price of $480 million in 2013.

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In November 2015, Western Union was granted an exclusive due diligence period to progress its indicative proposal, but according to OzForex, has failed to deliver.

“Although discussions continued for some months, Western Union has not submitted a binding proposal,” said OFX in a release. “Accordingly, the Board of OFX has terminated discussions with Western Union.”

Although Western Union's bid was considered "highly credible" by analysts, given its US$10 billion market cap, OFX has been trading at a deep discount to the WU proposed price of between $3.50 to $3.70 per share. On Friday, OzForex closed at $3.09. With the lack of a competiting bid, the market had already largely discounted the possibility of a deal.

According to the AFR, traders believe OzForex has been hampered by liquidity and wider market sell-off, while hedge funds reckon shaking "stock loose from OzForex's institutional holders" was too difficult. Wester Union too would have the upper hand in pricing discussions.

In a trading update on Monday, OzForex also noted that in Q4 2015, OFX had lower levels of trading activity than expected due to its rebranding process and transition to a new website URL, which combined with decreased volatility in the FX markets, saw a resulting fall in client acquisition levels.

OFX furthermore said that its December quarter Fee and Commission Income increased by nine percent to the prior corresponding quarter.

"OFX is now expecting underlying EBTDA for FY16 of $35.0 - $37.0 million, which represents growth versus the prior corresponding FY15 period, but is lower than previous guidance provided," the company said in a release. Earlier growth forecasts fell within the $38.5 million to $40.5 million mark.

However, it believes that revenue growth targets will double 2015's over the next four years to more than $200 million.

OFX's share price plummeted more than 36 percent following its negative announcements to $1.97 on Monday afternoon AEDT.

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