TLDR
- PayPal’s board believes the $60.50-per-share offer from Stripe and Advent International undervalues the company
- The $53B bid is backed by a ~$50B financing package from JPMorgan and Morgan Stanley
- Stripe and Advent would contribute $17B in equity and jointly own PayPal with equal stakes
- The board is weighing the bid against its own turnaround plan and the possibility of rival offers
- PayPal reports earnings on July 28, which investors will watch closely for signs of recovery
PayPal (PYPL) rose about 2% to $56.73 on Thursday after Reuters reported the company’s board views a $53 billion takeover proposal from Stripe and Advent International as too low.
The offer, at $60.50 per share, sits above PayPal’s recent trading price. But directors believe it doesn’t fully capture what the company could be worth if its turnaround plan plays out, according to a person familiar with the matter.
The board has not formally responded to the bid. It is reviewing the offer alongside the possibility of competing proposals before making any decision.
PayPal also has concerns about the certainty of financing, potential antitrust hurdles, and how long a deal could take to close.
Stripe and Advent first approached PayPal with Block in April. Block later exited the group before the latest joint proposal was submitted.
Financing and Deal Structure
JPMorgan and Morgan Stanley have put together a roughly $50 billion financing package to support the acquisition. Stripe and Advent would contribute around $17 billion in equity.
Under the current proposal, the two firms would jointly own PayPal with equal stakes, rather than splitting the business up.
The consortium has also discussed possible remedies if regulators push back. One option would involve separating PayPal’s Braintree business and transferring it to Advent, where it could be combined with existing payments holdings including Nuvei.
Despite PayPal’s reservations, Reuters reported that Stripe and Advent remain the most serious bidders and are still interested in reaching a deal. Talks are expected to continue.
Turnaround Plan and Earnings Ahead
PayPal has been restructuring under CEO Enrique Lores, who took over in March. The company reorganized into three divisions: checkout, Venmo consumer financial services, and payments and crypto.
First-quarter revenue rose 7% year over year to $8.35 billion. Payment volume climbed 8% on a currency-neutral basis to around $464 billion.
Earlier this year, PayPal issued weaker-than-expected guidance and flagged slowing momentum in its core checkout business. Investors will be watching the July 28 earnings report for signs that is turning around.
On the crypto side, PayPal’s PYUSD stablecoin recently expanded natively to Polygon through the network’s Open Money Stack.
A deal would also bring PayPal’s crypto products together with Stripe’s stablecoin infrastructure. Stripe acquired stablecoin platform Bridge for roughly $1.1 billion and has since expanded across multiple blockchain networks.
Advent joined the bid in part because funding the full equity portion would be difficult for privately held Stripe alone. The firm’s history with payments companies — including Worldpay, Vantiv, and Nuvei — could also give the consortium more flexibility if regulators push for structural changes.
Reuters noted the deal’s size and antitrust risks could still complicate any path to completion.
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