Payments company Stripe and private equity firm Advent International submitted the offer earlier in July, two unnamed sources said. The proposal, backed by about $50 billion in committed bank financing, implies a purchase price of $60.50 per PayPal share, about 28% above PayPal\u2019s closing price on Tuesday.<\/p>\n
The approach follows an initial contact made in early April, the sources added. Stripe and Advent have not yet received a response from PayPal and aim to advance discussions in the coming weeks. Under the current proposal, Stripe and Advent would jointly own PayPal on a 50-50 basis rather than pursue a break-up of the company. The sources cautioned that there is no certainty the talks will lead to a transaction.<\/p>\n
PayPal, Stripe and Advent declined to comment on the situation. The discussions are confidential, and the people providing information requested anonymity.<\/p>\n
Founded in the late 1990s, PayPal was an early digital payments pioneer but has come under pressure as consumers adopt alternative payment methods and competitors such as Apple Pay and Google Pay increase their market share. The company has experienced slowing growth and intensified competition, erasing much of the value gained during the COVID-19 pandemic.<\/p>\n
PayPal\u2019s market capitalization peaked at around $360 billion in 2021 and has fallen to roughly $36 billion at its low point this year. The company has lost more than 40% of its market value over the past 12 months.<\/p>\n
Since taking over in March, CEO Enrique Lores has launched a broad turnaround plan focused on simplifying operations and driving growth. In April, PayPal reorganized into three units covering checkout, consumer financial services Venmo, and payments and crypto, accompanied by several management changes. Lores has also set out plans to use artificial intelligence to streamline operations and remove duplicated workforce layers, with initiatives expected to save about $1.5 billion over two to three years, which the company plans to reinvest in growth.<\/p>\n
A successful PayPal deal would add to a series of recent transactions in the global payments industry, where acquirers are targeting assets amid rapid financial technology change and the growing role of artificial intelligence. Companies are seeking greater scale and exposure to faster-growing areas such as cross-border and business-to-business payments, as traditional payment processing growth slows.<\/p>\n
Recent activity has included Global Payments\u2019 agreement to acquire Worldpay from FIS and GTCR for $24.25 billion, involving GTCR\u2019s exit from its 55% stake and FIS\u2019s sale of its remaining 45% holding. Smaller deals include Canadian payments firm Nuvei\u2019s $2.75 billion acquisition of Payoneer Global; Nuvei is backed by Advent and other private equity investors. Mastercard is also exploring the sale of a majority stake in its UK payments subsidiary Vocalink to British banks, according to the Financial Times.<\/p>\n
PayPal reported first-quarter revenue of $8.35 billion, up 7% year on year and above analysts\u2019 average estimate of $8.05 billion. On a currency-neutral basis, total payment volumes rose 8% to about $464 billion.<\/p>\n
Privately held Stripe, headquartered in San Francisco and Dublin, was valued at $159 billion in a February tender offer for employees and shareholders, more than 70% higher than a similar sale a year earlier. The company enables businesses to accept payments, make payouts and automate financial processes.<\/p>\n
What price have Stripe and Advent offered for PayPal?<\/strong> How is the proposed acquisition financed?<\/strong> Will PayPal be broken up if the deal proceeds?<\/strong> Is the deal certain to go ahead?<\/strong>
They have proposed $60.50 per share, valuing PayPal at more than $53 billion and representing about a 28% premium to PayPal\u2019s most recent closing share price.<\/p>\n
The proposal is backed by about $50 billion in committed financing from banks, according to a person familiar with the matter.<\/p>\n
Under the current proposal, Stripe and Advent would each hold an equal stake and jointly own PayPal, rather than breaking up the company.<\/p>\n
No. PayPal has not yet responded to the latest approach, and the sources involved stated there is no certainty the proposal will result in a completed transaction.<\/p>\n