PayPal’s board told advisers the $53 billion Stripe-Advent bid undervalues the company. Price, financing, and regulatory hurdles remain. The July 28 earnings report will be a key test.
PayPal’s board told advisers the $53 billion takeover offer from Stripe and Advent International, submitted July 15, undervalues the company, according to a person familiar with the matter. The board has not formally responded to the $60.50-per-share proposal. The preliminary view is that the offer does not reflect the value management could generate by completing its turnaround, the person said.
The bid represents a 28% premium to PayPal’s share price before the approach became public. Price is only one obstacle. Directors are examining whether the bidders can complete the financing, how regulators might view a combination of the two largest online payments platforms and how long approval could take. Stripe and PayPal together process roughly $3.7 trillion in annual payments volume.
The consortium has assembled about $50 billion in financing from J.P. Morgan and Morgan Stanley, which are also advising the bidders. Stripe and Advent would contribute $17 billion in equity and own PayPal equally rather than divide it immediately. Advent’s experience in payments could become important during an antitrust review. The private equity firm has previously invested in Worldpay, Vantiv and Nuvei, giving it a potential landing place for assets that regulators might require the combined company to sell.
A possible remedy would involve separating PayPal’s Braintree operation or other businesses and transferring them to Advent. That would reduce overlap between Stripe and Braintree, which both provide payment infrastructure to large digital merchants. Block initially joined Stripe and Advent in approaching PayPal in April. Block withdrew before the current offer was submitted.
For Stripe, PayPal would add a large consumer network, the Venmo wallet and a recognizable checkout credential. Stripe recruited Advent, people familiar with the matter said, because financing the full equity contribution alone would be difficult. Advent also gives the group greater flexibility to restructure the transaction around regulatory objections.
PayPal’s board now must compare the certainty of a cash offer with the uncertain upside of CEO Enrique Lores’ turnaround. Investors will look to PayPal’s July 28 earnings report for evidence that branded checkout is stabilizing. Weaker guidance and slowing growth made the company vulnerable to an approach.
A rejection could open the door for a higher bid. The transaction’s size limits the pool of potential buyers. Reuters described Stripe and Advent as the most serious bidder to surface so far. Any deal would face scrutiny from the Justice Department or the Federal Trade Commission, given the combined market share in online payments. PayPal shares closed at $47.30 on July 14, before the offer was reported.
For more on the broader implications of M&A and valuation trends, see stock market analysis.
Drafted by a large language model from the source reporting linked above, then screened by automated publishing checks. It is not read by a journalist before publication. Some articles cite our Alpha Score. Verify prices and figures against the original source. Educational coverage, not personalized advice.