Payments processor Stripe and private equity firm Advent International have submitted a joint proposal to acquire PayPal Holdings for $60.50 per share. The offer, which values the digital payments pioneer at more than $53 billion, represents a 28% premium over PayPal's recent closing share price. This unsolicited bid follows an initial approach made by the two firms in early April, though PayPal has yet to formally respond to the proposal.
Under the terms of the suggested deal, Stripe and Advent would each hold an equal stake in PayPal, intending to keep the company intact rather than breaking it into smaller pieces. The bid is supported by approximately $50 billion in committed financing from various banks. Reports also suggest that Block may be involved in the consortium, contributing additional equity to the potential acquisition.
PayPal has faced significant challenges in recent years as it struggles to maintain its market dominance against newer competitors like Apple Pay and Google Pay. After reaching a peak market capitalization of roughly $360 billion in 2021, the company's value has declined sharply, falling to as low as $36 billion earlier this year. The firm has recently undergone a series of management changes and operational restructuring efforts to simplify its business model.
Investors reacted positively to the news, with PayPal shares rising significantly in premarket trading. While the proposal is substantial, there is no guarantee that it will lead to a final agreement. The company's board of directors is expected to review the offer in the coming days, and both Stripe and Advent are reportedly seeking to advance discussions before the end of the month.