PayPal’s board reckons that a $53bn (£39bn) joint takeover approach from Stripe and the private-equity firm Advent International sells the payments pioneer short, the latest twist in a fast-moving round of payments consolidation.
People familiar with the talks told Reuters the directors view the offer as inadequate and have yet to respond formally.
The approach values PayPal at $60.50 a share, a premium of roughly 28% over its $47.37 close the day before the news broke.
It would be the boldest move yet by Stripe, the privately held payments company reportedly valued at about $159bn, whose founders have long circled the public markets without joining them.
Word of the bid sent PayPal stock up about 19% to $56.60 in early trading, per market reports. That is a rare jolt for a company whose shares have shed more than 40% over the past year.
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The directors are weighing the bid against management’s own turnaround plan, and reckon the price fails to capture the upside if that plan lands, Reuters reported.
They are also said to be studying the antitrust risk and the lengthy timeline any deal of this size would face, given how much of the online checkout market the combined group would touch.
To pre-empt regulators, Stripe and Advent have discussed remedies including carving out Braintree, PayPal’s merchant-processing arm, should watchdogs demand it.
The two would own PayPal equally and have no plans to dismantle the rest of the business, the sources said, a signal aimed as much at nervous merchants as at antitrust officials.
The financing points to serious intent rather than a lowball flyer. The pair have lined up roughly $50bn in committed debt from JPMorgan and Morgan Stanley, on top of about $17bn of their own equity, according to the report.
That is a heavy commitment to walk away from lightly, and it suggests the bidders expect to have to raise their number before this is done.
PayPal’s market value has slid to around $36bn this year, a steep fall from the roughly $360bn it commanded at its 2021 peak.
Its shares have lost more than 40% over the past 12 months, even as the company still counts some 439 million active accounts, a scale few rivals can match.
The target is not defenceless. PayPal has drafted in Goldman Sachs and Evercore to advise as suitors circle, and all three parties declined to comment on the talks.
The approach lands in a jittery stretch for the sector, with incumbents from Visa to the card networks racing into stablecoins and account-to-account rails that chew at PayPal’s core.
Consolidation has picked up in step, as scale looks like the surest hedge against margin pressure and the steady creep of newer rivals.
For Stripe, buying a listed name with hundreds of millions of consumer accounts would hand it a retail-facing brand it has never had. For Advent, it is a bet that a battered franchise can be nursed back to health away from quarterly scrutiny.
It also underlines how far private fintech valuations have run ahead of their listed peers. On the reported numbers, Stripe alone is worth more than four times PayPal’s current market cap, an inversion that would have looked absurd in 2021.
The interest is not new, either. Reuters said Stripe and Advent first sounded out PayPal in early April before tabling a formal proposal this month, and are now pushing to move talks forward over the coming weeks, which suggests neither side sees the door as closed.
Not everyone thinks $60.50 is stingy, and not everyone thinks it is generous. “Big Short” investor Michael Burry publicly called the figure too low, pegging fair value nearer $75 to $115 a share, which hints the market expects a richer number.
For now the decision sits with PayPal’s board, which can hold out for more, invite rival bidders, or bet that its turnaround delivers above $60.50 a share on its own.
None of the three parties is saying which way it leans, and the reporting rests entirely on people who would not be named.
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