Stripe and Advent make joint approach to buy PayPal

Stripe and Advent have submitted a joint proposal to acquire PayPal, with about $50 billion in committed bank financing behind the approach, an unidentified person told Reuters. The offer would represent roughly a 28% premium to PayPal’s closing share price on Tuesday, according to the same Reuters account, creating a potential test of shareholder appetite after a sharp fall in the payments group’s market value.

Finextra reported that the transaction would value PayPal at more than $53 million. That figure sits alongside Reuters’ report of $50 billion in committed financing and the stated equity-market premium.

The proposal was lodged earlier this month after an initial approach in early April, Reuters reported, citing sources familiar with the matter. Stripe and Advent have not yet received a response from PayPal and are seeking to move talks forward in the coming weeks, the sources told Reuters.

A financed takeover offer typically signals that lenders have agreed, subject to conditions, to provide debt funding needed to complete the acquisition. Such commitments can give a bidder greater credibility with a target board, although they do not by themselves mean a transaction will be agreed. PayPal’s response, the structure of any equity contribution and the willingness of its board to engage remain central to whether discussions progress.

The approach comes during a period of operational change at PayPal. Finextra reported that PayPal appointed Enrique Lores as chief executive in February, after board concerns that the company was not doing enough to address competitive pressure from large technology companies including Apple and Google.

Since taking the role, Lores has reorganised PayPal into three operating businesses, according to Finextra. Those units are Venmo, the consumer and merchant checkout business, and a division that includes Braintree, small-business processing and crypto activities.

Finextra also reported that Lores has closed PayPal’s venture capital arm. In May, he set out plans to use artificial intelligence to make operations more efficient across the company and reduce overlapping workforce layers, with a goal of saving about $1.5 billion over the next two to three years.

PayPal’s valuation has fallen sharply from its pandemic-era highs. Finextra reported that the company’s market capitalisation reached about $360 billion in 2021 and dropped to as low as roughly $36 billion this year. The company has lost more than 40% of its market value over the past 12 months, according to the same report.

The reported approach also reflects continued consolidation pressure in digital payments, where scale, merchant relationships and consumer distribution can shape pricing power and product investment. For Stripe, a deal for PayPal would pair one of the largest privately held payments infrastructure providers with a global consumer and merchant payments brand. For Advent, the proposal would represent a large private-capital role in a sector under pressure from technology platforms, banks and newer fintech competitors.

This story draws on original reporting from Finextra Research.