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PayPal rejects $53bn bid from Stripe and Advent
PayPal’s board sees a $53bn takeover approach from Stripe and Advent as too low, according to Reuters, despite a 28% premium to its prior close.
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PayPal’s board believes a $53bn takeover approach from Stripe and Advent International undervalues the company, according to Reuters, citing people familiar with the talks. The offer values PayPal at $60.50 a share, about 28% above its $47.37 closing price the day before news of the bid emerged.
The reported approach would mark Stripe’s biggest move yet. The privately held payments company was reportedly valued at about $159bn, and an acquisition of PayPal would give it a large consumer-facing brand it has never had. After the report, PayPal shares rose about 19% to $56.60 in early trading, a notable jump for a stock that has fallen more than 40% over the past year.
PayPal’s directors are weighing the offer against management’s own turnaround plan and reportedly believe the current price does not reflect the upside if that effort succeeds. They are also assessing antitrust risk and the long timeline a deal of this size could face, given the combined company’s reach in online checkout.
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To address regulatory concerns, Stripe and Advent have discussed possible remedies, including a Braintree divestiture if required by regulators. Reuters said the two bidders would own PayPal equally and do not plan to break up the rest of the business.
Financing and deal pressure
The bid appears heavily financed. Reuters reported that Stripe and Advent have secured roughly $50bn in committed debt from JPMorgan and Morgan Stanley, alongside about $17bn of their own equity.
PayPal’s market value has dropped to around $36bn this year, far below the roughly $360bn peak it reached in 2021. Even so, the company still has about 439 million active accounts. PayPal has hired Goldman Sachs and Evercore as advisers, while all three parties declined to comment.
Reuters said Stripe and Advent first approached PayPal in early April before submitting a formal proposal this month, and are now trying to advance talks in the coming weeks.
“Big Short” investor Michael Burry publicly called the figure too low, pegging fair value nearer $75 to $115 a share.
Enterprise Editor
Marcus follows the money. He covers enterprise software, cloud architecture, and the tectonic shifts in Big Tech strategy. He translates dense earnings calls and complex M&A activity into actionable insights about where the industry is actually heading. If a tech giant makes a silent pivot, Marcus is usually the first to notice.
via TNW
