PayPal reportedly rejected a takeover offer last month over concerns it was being undervalued.
Plans for a joint acquisition of PayPal have fallen through, according to Bloomberg News, weeks after the company’s board reportedly rejected a $53bn-plus offer from Stripe and US private equity firm Advent International.
Talks of a potential Stripe acquisition of PayPal have swirled for months. According to reports last month, Stripe and Advent offered to buy PayPal at $60.50 per share, which would have valued the fintech at more than $53bn and represented a 28pc premium to its share price in mid-July.
That offer was, however, reportedly rejected by PayPal’s board over concerns that it undervalued the company. Sources told Bloomberg that Stripe and Advent have now abandoned talks.
Founded in the late 1990s, PayPal has struggled in recent years to modernise against emerging rivals in the payments space such as Apple, Google and Stripe. PayPal’s shares have dropped dramatically over recent years as a result, but picked up somewhat last month after promising reports of a takeover by the $159bn Stripe.
PayPal’s shares have jumped nearly 10pc over the last month, now giving the company a market capitalisation of $52.5bn – up from roughly $43bn in February, when Bloomberg first reported on a potential acquisition. The fintech also recorded a 5pc growth in net revenue in the second quarter.
PayPal and Stripe would each benefit from the possible acquisition, according to Chris Jones, managing director at PSE Consulting.
“PayPal’s wallet could build on the early success of Link, Stripe’s consumer-facing accelerated checkout, which already counts more than 200m consumer accounts, and would create further opportunities to exploit Stripe’s $1.1bn investment in stablecoin infrastructure through its purchase of Bridge,” he told SiliconRepublic.com last month.
The US fintech brought in HP’s Enrique Lores as its new CEO earlier this year, replacing Alex Chriss, whose work was “not in line” with board expectations. By June, PayPal had reportedly planned to shut down its venture capital arm.
Stripe, meanwhile, is investing heavily in product development and making strategic acquisitions, including the programmable wallet company Privy, stablecoin orchestration platform Bridge and billing platform Metronome.
It recently announced that it is acquiring large language model marketplace OpenRouter at a reported cost of between $7bn and $10bn as part of efforts to help businesses optimise token costs.
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