PayPal’s board is reviewing a $53 billion takeover proposal from financial technology company Stripe and private equity firm Advent International, but early discussions suggest directors believe the offer undervalues the payments giant while raising concerns over financing and regulatory approval.
According to people familiar with the matter, the board has not yet formally responded to the proposal submitted earlier this month. Directors are evaluating both the offer and the possibility that additional bidders could emerge as they compare the proposal with the company’s long-term turnaround strategy.
The consortium has offered $60.50 per share, representing a premium over PayPal’s recent market price. However, sources said the board believes the bid does not fully reflect the company’s future growth potential if management succeeds in executing its recovery plan. PayPal shares rose 2% to close at $56.73 following reports of the offer.
PayPal has faced mounting competition in recent years from digital payment rivals including Apple Pay and Google Pay. The company has been working to restore investor confidence after slower growth and pressure on its share price.
A merger between Stripe and PayPal would create one of the world’s largest online payments businesses, handling an estimated $3.7 trillion in annual payment volume. The combined company would strengthen its position among internet merchants worldwide.
Beyond the proposed price, PayPal’s directors are examining the certainty of financing, possible antitrust challenges and the length of time required to complete such a large transaction. Additional board meetings are expected as discussions continue.
The bidding group is attempting to ease some of those concerns. Sources said JPMorgan and Morgan Stanley have arranged a financing package worth about $50 billion while also serving as advisers to the consortium. Stripe, founded by Irish brothers Patrick and John Collison, together with Advent International, is expected to contribute approximately $17 billion in equity toward the acquisition.
PayPal, Stripe, Advent, JPMorgan and Morgan Stanley have all declined to comment publicly on the proposal.
Under the current plan, Stripe and Advent would jointly own PayPal, each holding an equal stake instead of splitting up the company. People familiar with the discussions said the consortium has also explored potential solutions to satisfy competition regulators if required.
One option under consideration would involve separating PayPal’s Braintree payment processing business or other assets and transferring them to Advent, which could combine them with existing investments in the payments sector, including Nuvei.
Although PayPal has reservations about the current offer, sources said Stripe and Advent remain the leading bidders and are interested in reaching an agreement. Negotiations are expected to continue over the coming weeks.
Investors are now turning their attention to PayPal’s earnings report scheduled for July 28, which is expected to provide fresh insight into whether the company’s core checkout business is stabilising as management pursues its recovery strategy.
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