Payments company Stripe and private equity firm Advent International have made a joint offer to acquire PayPal Holdings Inc, for $60.50 per share, in a deal that would value the payments company at more than $53 billion, two people said.
The offer, submitted earlier this month, is backed by about $50 billion in committed financing from banks, said one of the people. The offer represents around a 28% premium to PayPal's closing share price on Tuesday.
The people, who are familiar with the matter, declined to be named as the deal discussions are confidential. PayPal, Stripe and Advent declined to comment.
The proposal follows an initial approach made in early April, the sources said. Stripe and Advent have not received a response from PayPal and are seeking to advance discussions in the coming weeks, the sources added.
Under the proposal, Stripe and Advent would jointly own PayPal, with each holding an equal stake, rather than breaking up the company, the people said. There is no certainty the approach will result in a transaction, they added.
PayPal shares were last up 15% in premarket trading.
Founded in the late 1990s, PayPal was an early player in digital payments, but has faced increasing competition as consumers have embraced alternative payment methods and rivals such as Apple Pay and Google Pay have gained market share.
It has spent the past several years grappling with slowing growth and intensifying competition in digital payments, wiping out much of the value it gained during the pandemic.
The company's market capitalization peaked at about $360 billion in 2021 and fell to as low as roughly $36 billion this year. It has lost more than 40% of its market value over the past 12 months.
After taking over in March, PayPal CEO Enrique Lores started a sweeping turnaround exercise to simplify the payments provider and sharpen its focus on growth.
In April, the company split its operations into three units covering checkout, consumer financial services Venmo, and payments and crypto, while making a series of management changes.
PayPal's revenue rose 7% to $8.35 billion in the first quarter, beating analysts' average estimate of $8.05 billion. On a currency-neutral basis, total payment volumes jumped 8% over a year ago to about $464 billion.
Lores outlined plans in May to leverage artificial intelligence to streamline operations across the company and eliminate duplication in workforce layers, but did not provide additional details.
The company has said these initiatives would save about $1.5 billion over the next two to three years, adding it will reinvest that amount to drive new growth.
Stripe, which is privately held, is among the industry's most valuable companies. It was valued at $159 billion in a tender offer for employees and shareholders in February, a more than 70% jump from a similar share sale a year earlier.
The company, with headquarters in San Francisco and Dublin, allows companies to accept payments, make payouts and automate financial processes.
Source: Reuters
