PayPal in Talks to Sell Itself to Stripe, Private-Equity Firm Advent
The fintech startup and private-equity firm offered to buy the struggling payments company in July
- PayPal Holdings is in talks to sell itself to a group that includes Stripe and private-equity firm Advent International.
- Stripe and Advent proposed paying $60.50 a share for PayPal in July, a price PayPal viewed as insufficient.
- The two sides have since been negotiating a potentially higher price, and a deal could come together in the coming weeks.
PayPal PYPL 1.77%increase; up pointing triangle Holdings is in talks to sell itself to a group that includes Stripe and the private-equity firm Advent International, according to people familiar with the matter.
Stripe and Advent in July proposed paying $60.50 a share for PayPal, a price PayPal viewed as insufficient, some of the people said. The two sides have since been negotiating a potentially higher price, the people said.
It is possible a deal could come together in the coming weeks, though there are no guarantees the parties will reach an agreement.
Before the July proposal, which valued the company at around $53 billion, PayPal shares had been trading at historic lows, giving the company a market value of around $40 billion. The company reached its Covid-era peak of more than $300 a share in 2021, giving the company a market value of more than $280 billion.
PayPal shares rose 1.8% Friday after The Wall Street Journal reported on the deal talks, giving it a market value of close to $53 billion.
PayPal’s Chief Executive Enrique Lores is in the early stages of an ambitious turnaround plan, which has already involved steep cost cuts. When the company reported earnings late last month, Lores said it was focused on its turnaround strategy but would evaluate all opportunities to maximize shareholder value.
Lores, the former CEO of HP, assumed PayPal’s top job in March after it issued a profit warning, succeeding former CEO Alex Chriss. The company had blamed the poor outlook on sputtering growth from its key branded-checkout product, which lets customers use PayPal when making online purchases, and poor internal execution.
Lores quickly reshuffled PayPal’s operations into three distinct business lines and said the company will accelerate its adoption of artificial intelligence.
PayPal in its earnings report pointed to growth in peer-to-peer payments platform Venmo and payments processor Braintree, as well as its debit card and buy now, pay later businesses.
Some analysts initially expressed skepticism that PayPal would strike a deal with Stripe, with one at William Blair calling the $60.50 bid a “lowball offer” and questioning its industrial logic.
Stripe, a closely held payments processor, counts venture-capital firm Sequoia Capital among its investors. Stripe was founded by brothers Patrick and John Collison and its valuation hit $159 billion earlier this year.
Advent, a Boston-based firm with more than $90 billion under management, focuses on investments in five main sectors: business and financial services, healthcare, consumer, industrials and technology.