Stripe, Advent Pursue Joint Buyout of PayPal for $53 Billion
Summary
- Stripe and Advent International are pursuing a joint acquisition of PayPal in a deal worth about $53 billion.
- The offer price was $60.50 a share, implying a roughly 28% premium to the previous session’s closing price, while PayPal shares rose 18% in premarket trading.
- Stripe and Advent secured about $50 billion in financing commitments from banks for the acquisition and would jointly own PayPal with equal stakes if the deal goes through.
Forecast Trend Report by Period
Offer values PayPal at a 28% premium; shares jump 18% in premarket trading
This article was published on Hankyung Global Market, South Korea’s largest platform for overseas investment information.
Stripe and private equity firm Advent International are pursuing a joint acquisition of PayPal in a $53 billion deal.
Reuters reported exclusively on July 15 that Stripe and Advent submitted a proposal to PayPal earlier this month to acquire PayPal Holdings for $60.50 a share. The offer represents a premium of about 28% to PayPal’s closing price on July 14.
PayPal shares were up 18% in premarket US trading on July 15.
Stripe and Advent have secured financing commitments of about $50 billion from banks for the proposed takeover, a person familiar with the matter said.
The two firms have not yet received a response from PayPal.
Under the proposal, Stripe and Advent would each hold equal stakes in PayPal rather than break up the company, people familiar with the matter said.
Founded in the late 1990s, PayPal was an early player in digital payments. But it has faced intensifying competition as consumers shift to alternative payment methods and rivals such as Apple Pay and Google Pay gain market share.
The company’s market value peaked at about $360 billion in 2021 and has fallen to about $36 billion this year. Its market capitalization has declined more than 40% over the past 12 months.
PayPal reported first-quarter revenue of $8.35 billion, up 7% from a year earlier and above analysts’ average estimate of $8.05 billion. Total payment volume, excluding foreign-exchange fluctuations, rose 8% from a year earlier to about $464 billion.
Enrique Lores, who became PayPal’s chief executive officer in March, has begun restructuring efforts to streamline the company and sharpen its focus on growth.
Digital payments companies are pursuing acquisitions to build scale as growth in traditional e-commerce payments slows. They are also moving more quickly into areas including cross-border payments and business-to-business payments.
Kim Jung-a, contributing reporter
Korea Economic Daily
hankyung@bloomingbit.ioThe Korea Economic Daily Global is a digital media where latest news on Korean companies, industries, and financial markets.