Stripe, Advent make $53bn takeover offer for PayPal
A $53 billion joint bid from Stripe and Advent International tests PayPal's new CEO and his turnaround strategy for the struggling digital payments pioneer.
Stripe and private equity firm Advent International have proposed acquiring PayPal for $60.50 per share, a roughly 28 percent premium to its Tuesday closing price. The joint bid values the digital payments pioneer at more than $53 billion and is backed by approximately $50 billion in committed bank financing. The offer was submitted earlier this month, following an initial approach in early April.
Under the terms, Stripe and Advent would each hold an equal stake in PayPal, keeping the company intact rather than breaking it up. The consortium has not yet received a response from PayPal's board and is seeking to advance discussions in the coming weeks. There remains no certainty the approach will result in a transaction.
The unsolicited bid presents an immediate test for PayPal chief executive Enrique Lores. Since taking over in March, Lores has initiated a broad turnaround exercise aimed at simplifying the business and refocusing on growth. In April, he split the company into three distinct units covering checkout, the consumer financial services app Venmo, and payments alongside crypto.
Investors and market professionals must now weigh the merits of this internal restructuring against the certainty of a lucrative cash-out. Accepting the bid would immediately lock in a significant premium for shareholders who have watched the stock plummet. Rejecting it means betting that Lores can successfully revive growth at an independent PayPal despite fierce headwinds.
Those headwinds have severely eroded PayPal's market standing. The company was an early digital payments leader in the late 1990s, but its growth has slowed as consumers adopted alternative payment methods. Rivals such as Apple Pay and Google Pay have steadily captured market share, wiping out much of the valuation PayPal gained during the pandemic.
The financial toll has been steep. PayPal's market capitalization peaked at approximately $360 billion in 2021 before collapsing to roughly $36 billion earlier this year. The stock has lost more than 40 percent of its value over the past 12 months alone. A successful acquisition by Stripe and Advent would cap a dramatic fall from PayPal's pandemic-era highs.
