PayPal Rises More Than 15% Premarket, Stripe and Advent Jointly Propose Over $53 Billion Acquisition Offer

TradingKey - On July 14, Eastern Time, Reuters, citing people familiar with the matter, reported that payment processing company Stripe and private equity firm Advent International have jointly submitted an acquisition proposal to PayPal ( PYPL ), offering to acquire the payment pioneer at $60.50 per share, valuing the deal at more than $53 billion. Boosted by the news, PayPal's stock price surged in pre-market trading on July 15, at one point rising over 16%.

[Source: Futu]

The offer represents a premium of approximately 28% over PayPal's Tuesday closing price. According to people familiar with the matter, the proposal was formally submitted earlier this month and has secured approximately $50 billion in committed financing support from banks. The two acquirers plan to jointly hold PayPal with a 50% stake each and currently have no intention of breaking up the company.

Sources said that the formal offer is a further step forward following preliminary contact in early April. As of now, PayPal has not yet responded to the offer, and Stripe and Advent are seeking to advance further discussions in the coming weeks. The sources also emphasized that the expression of interest does not guarantee a final transaction will be reached.

Founded in the late 1990s, PayPal was an early pioneer in the digital payments field. In recent years, as competitors such as Apple Pay and Google Pay have continued to chip away at its market share, PayPal has faced the dual pressures of slowing growth and intensifying competition, with almost all of its market value gains accumulated during the pandemic being wiped out. The company's market value reached a peak of approximately $360 billion in 2021, and fell to around $36 billion at one point this year, with a cumulative decline of over 40% over the past 12 months.

CEO Enrique Lores, who took office in March this year, has launched a comprehensive turnaround plan. In April, the company officially announced a strategic reorganization, splitting its business into three major segments: Checkout Solutions & PayPal, Consumer Financial Services & Venmo (including Venmo), and Payment Services & Crypto.

If the deal is ultimately finalized, it will be another major move in the global payment industry's merger and acquisition wave. Recently, payment companies have increasingly sought scale effects through M&As to address the challenges of slowing growth in traditional payment businesses, while extending into faster-growing areas such as cross-border payments and B2B payments.

Stripe, currently a private company, was founded by Irish brothers Patrick Collison and John Collison and is headquartered in San Francisco and Dublin. In February this year, the company achieved a valuation of $159 billion through an employee stock tender offer, representing a jump of more than 70% from its share sale price during the same period of the previous year.