PayPal’s board turned down $60.50 a share in July. Stripe and Advent International are back at the table anyway.
The Wall Street Journal reported this week that talks between PayPal, Stripe and the private equity firm have restarted and could produce a deal within weeks. People close to the matter told the paper it could still fall apart. The July bid valued PayPal at about $53 billion, a 28 percent premium to its trading price, and the board decided that undersold the company. Stripe and Advent are now said to be weighing a higher figure.
PayPal’s stock climbed more than 30 percent in July and ticked up again on the latest reporting.
How a deal would work
The two buyers would hold equal stakes, and neither would absorb the other. Both have indicated they do not plan to break up the business. About $50 billion in bank financing has reportedly been lined up, with Stripe and Advent splitting the equity. How they would divide it on a deal this size has not been disclosed.
Stripe, founded by brothers Patrick and John Collison, spent years pulling merchants away from PayPal as the developer-friendly alternative. It is now privately valued at around $159 billion. Put together, the two would process roughly $3.7 trillion a year and give Stripe a way to lean less on Visa and Mastercard. Advent is a Boston firm with more than $90 billion under management and a history of financial services deals.
A company under pressure
PayPal’s stock sat near historic lows before the July offer, and its market value briefly slipped to around $40 billion. At the pandemic peak it was worth about $320 billion.
Enrique Lores became CEO in March, brought in from HP after the board lost patience with Alex Chriss’s turnaround. He has split the company into three units: checkout and core PayPal, consumer products such as Venmo, and payments and crypto. His cost-cutting plan could remove up to a fifth of the workforce over the next few years.
Not everyone sees the logic. An analyst at William Blair called the original bid a lowball offer and asked why Stripe would want the job.
Any agreement would probably draw close antitrust scrutiny in the United States and Europe. PayPal has not commented publicly. Stripe said it does not comment on rumors or speculation.
