One of the best-known names in online payments may be headed for new ownership. Stripe, the fast-growing payments processor, and the private-equity firm Advent International have jointly offered to buy PayPal for more than $53 billion, according to a Reuters report picked up across financial news outlets. This is a reported offer, not a completed or confirmed deal: PayPal has not responded, and none of the companies has publicly commented.
The terms
The bid values PayPal at $60.50 a share, roughly a 28% premium to its closing price the day before, and is backed by about $50 billion in committed bank financing. Under the reported structure, Stripe and Advent would hold equal stakes and keep PayPal intact rather than break it up. Reuters reported that the two submitted the offer earlier this month after an initial approach in April, and hope to move talks forward within weeks.
Investors liked what they heard. News of the bid sent PayPal's shares up about 15% in premarket trading on Wednesday.
Why PayPal is a target
That enthusiasm reflects how far PayPal has fallen. A pioneer of online payments, the company was once one of the most valuable in fintech, but its stock has slid for years as growth slowed and competition intensified from Apple Pay, Google Pay and a wave of newer rivals. A depressed share price is exactly what makes a company a takeover candidate: buyers see a well-known brand, a huge base of users and merchants, and an opportunity to acquire it for far less than it once commanded.
What a combination could mean
Pairing Stripe, which sits behind the checkout flows of countless online businesses, with PayPal, one of the most recognizable consumer payment brands, would create a formidable force in digital payments. The combination could knit together the two companies' merchant relationships, user networks and newer bets, including in stablecoins, where both have moved. It would also concentrate an enormous amount of payments activity, and the data that comes with it, under common ownership, which is likely to draw close scrutiny from antitrust regulators in the United States and abroad.
A long way to go
For now, the important caveats are that this is a report of an offer, that PayPal's board has not weighed in, and that large deals of this kind can change shape or collapse entirely. But the sheer size of the bid, and the identity of the bidders, signals that some of the biggest players in payments see value in a company the market had written down, and that the industry's competitive map could be redrawn if the talks advance.
