We observe the radio galaxy PKS 1934-63 (at $z=0.1825$) using MUSE (Multi Unit Spectroscopic Explorer) on the Very Large Telescope (VLT). The radio source is GigaHertz Peaked Spectrum and compact (0.13 kpc), implying an early stage of evolution ($leq 10^4$ yr). Our data show an interacting pair of galaxies, projected separation 9.1 kpc, velocity difference $Delta(v)=216$ km $rm s^{-1}$. The larger galaxy is a $rm M_{*}simeq 10^{11}M_{odot}$ spheroidal with the emission-line spectrum of a high-excitation young radio AGN, e.g. strong [OI]6300 and [OIII]5007. Emission-line ratios indicate a large contribution to the line luminosity from high-velocity shocks ($simeq 550$ km $rm s^{-1}$) . The companion is a non-AGN disk galaxy, with extended $rm Halpha$ emission from which its star-formation rate is estimated as $rm 0.61~M_{odot}yr^{-1}$. Both galaxies show rotational velocity gradients in $rm Halpha$ and other lines, with the interaction being prograde-prograde. The SE-NW velocity gradient of the AGN host is misaligned from the E-W radio axis, but aligned with a previously discovered central ultraviolet source, and a factor 2 greater in amplitude in $rm Halpha$ than in other (forbidden) lines (e.g. [OIII]5007). This could be produced by a fast rotating (100-150 km $rm s^{-1}$) disk with circumnuclear star-formation. We also identify a broad component of [OIII]5007 emission, blueshifted with a velocity gradient aligned with the radio jets, and associated with outflow. However, the broad component of [OI]6300 is redshifted. In spectral fits, both galaxies have old stellar populations plus $sim 0.1%$ of very young stars, consistent with the galaxies undergoing first perigalacticon, triggering infall and star-formation from $sim 40$ Myr ago followed by the radio outburst.