Story
PayPal Board Views $53 Billion Stripe-Advent Bid as Inadequate, Sources Say
Summary
PayPal's board of directors reportedly sees a $53 billion takeover offer from Stripe and Advent International as too low and faces significant regulatory and financing challenges, according to sources familiar with the matter.
PayPal's board views a $53 billion takeover proposal from rival Stripe and private equity firm Advent International as undervaluing the company and presenting considerable hurdles, a person familiar with the matter said. This initial assessment could set the stage for prolonged negotiations over the future of the U.S. payments giant, which has not yet formally responded to the offer.
Board's Objections and Offer Details
The consortium's bid of $60.50 per share is seen by the board as failing to reflect the potential value of PayPal's ongoing turnaround strategy, the source said. The payments company, which has struggled against newer competitors like Apple Pay and Google Pay, has been working to revive its slowing growth and flagging share price.
Beyond the price, the board is weighing several other critical factors, according to the source. These include:
- Regulatory Hurdles: A merger between Stripe and PayPal, two of the largest online payment platforms, would likely face intense antitrust scrutiny. A combined entity would process approximately $3.7 trillion in annual volume.
- Financing Certainty: The complexity and size of the deal raise questions about the stability of the financing package.
- Timeline: Any potential transaction would face a lengthy path to completion.
The Consortium's Strategy
AdTo back the offer, Stripe and Advent have reportedly secured a financing package of roughly $50 billion from JPMorgan and Morgan Stanley, with the two bidders contributing $17 billion in equity, according to people familiar with the bid. The proposal would see Stripe and Advent jointly own PayPal with equal stakes.
Anticipating regulatory challenges, the consortium has considered potential remedies, one source said. One option involves separating PayPal's Braintree business or other assets and transferring them to Advent, which has a significant portfolio of payments investments, including Nuvei.
Market Context and Next Steps
The unsolicited offer comes at a critical time for PayPal. Investors will be closely watching the company's upcoming earnings report on July 28 for signs that its core checkout business is stabilizing. Following the news of the board's view, PayPal shares rose 2% to $56.73 on Thursday.
While the board has reservations, the Stripe-Advent consortium is considered the most serious bidder to emerge for PayPal, sources said. The initial approach was made in April by a group that also included Block, which has since exited the consortium.
Read next
More on Stocks
Palo Alto Networks Price Target Raised by Morgan Stanley on AI Security Growth
Morgan Stanley increased its price target for Palo Alto Networks to $410, citing the company's potential for significant market share gains driven by the growing need for cybersecurity in the AI era.
Z.AI and MiniMax: China’s Top AI Stocks Reveal Diverging Financial Health
A deep dive into the financials of China's leading listed AI labs, Z.AI and MiniMax Group, shows both are experiencing explosive, unprofitable growth, but with starkly different balance sheets and margin trajectories.
JPMorgan: Equities Can Withstand Higher Yields on Strong Corporate Health
Strategists at JPMorgan argue that robust corporate profit margins and underleveraged balance sheets provide a significant cushion for global stocks against the recent rise in bond yields and oil prices.
Kuehne+Nagel Shares Rise Over 4% on AWS Infrastructure Partnership
The Swiss logistics firm's stock gained after announcing a strategic collaboration with Amazon Web Services to manage its infrastructure, backed by a unique, multi-year call option arrangement.