PayPal board rejects $53bn Stripe and Advent bid

PayPal’s board has rejected a $53bn joint takeover approach from Stripe and Advent International, deeming the offer inadequate. The proposal valued the payments group at $60.50 per share, representing a 28% premium over its previous close of $47.37. Despite the initial rebuff, the bidders are pushing to continue discussions in the coming weeks.

News of the bid sent PayPal stock up roughly 19% to $56.60 in early trading, providing a rare uplift for a company that has seen its shares fall more than 40% over the past year. The company’s market value has plummeted from roughly $360bn at its 2021 peak to around $36bn today. However, the board believes the offer price fails to capture the potential upside of management’s ongoing turnaround plan.

The approach underscores a stark inversion in fintech valuations that puzzles many market observers. Stripe, which remains privately held, reportedly carries a valuation of about $159bn. That makes the private firm alone worth more than four times PayPal’s current market capitalisation, a dynamic that would have seemed implausible just a few years ago.

The financing structure behind the bid suggests serious intent rather than a speculative lowball offer. Stripe and Advent have lined up roughly $50bn in committed debt from JPMorgan and Morgan Stanley, backed by about $17bn of their own equity. The two parties planned an equal ownership split and signalled no plans to dismantle the rest of the business.

A major hurdle for any deal would be antitrust scrutiny, given the sheer scale of the online checkout market the combined group would control. To pre-empt regulators, the bidders reportedly discussed carving out Braintree, PayPal’s merchant-processing arm, as a potential remedy. PayPal’s directors are actively studying these regulatory timelines and risks.

The proposed acquisition fits into a broader wave of payments consolidation driven by margin pressure and new competitive threats. Incumbents like Visa are currently racing to adopt stablecoins and account-to-account rails that directly challenge PayPal’s core business. For Stripe, acquiring PayPal would instantly provide a consumer-facing brand and its 439 million active accounts. For Advent, it represents an opportunity to restructure a battered franchise away from the pressures of public quarterly scrutiny.

PayPal is not sitting idle, having brought in Goldman Sachs and Evercore as advisors. The door is not entirely shut on the bidders, who first approached the company in early April before submitting a formal proposal this month. Prominent investors clearly expect a higher number. "Big Short" investor Michael Burry publicly called the $60.50 figure too low, pegging fair value nearer $75 to $115 a share.