Stripe and Advent in Renewed Talks to Buy PayPal, Report Says
The Wall Street Journal reports the payments giant Stripe and private equity firm Advent International are discussing a higher offer after PayPal rejected a $53 billion bid in July.
Stripe and the private equity firm Advent International are back at the table with PayPal, discussing a deal that could be announced within weeks, according to the Wall Street Journal.
The two companies first approached PayPal in July with an offer of $60.50 a share, valuing the online payments company at $53 billion, the Journal reported at the time. PayPal turned it down. But the talks never really stopped, and the buyers are now considering a higher price per share, the Journal reported, according to Engadget.
At the time of the original offer, PayPal's stock was trading near historic lows, giving it a market value of around $40 billion, Engadget reported, citing the Journal. That is roughly $320 billion below the company's peak value during the pandemic, when a surge in online shopping drove PayPal's business.
A Bigger Player In Payments
Reuters has reported that Stripe and Advent would split ownership evenly and run PayPal jointly, with no plans to break the company apart, according to Engadget. The deal would make Stripe one of the largest payment processors in the world, handling around $3.7 trillion a year, Reuters reported. Reuters also said a merger could cut Stripe's dependence on Visa and Mastercard and let it fold in PayPal's Venmo app, its checkout system and its crypto tools.
PayPal declined to comment on the report, and a Stripe spokesperson said the company does not comment on "rumors or speculation," TechCrunch reported.
A Turnaround Under New Leadership
The talks come as PayPal's chief executive, Enrique Lores, tries to right the company. Lores took over in March after years at HP and moved quickly to reorganize PayPal into three units: one for checkout, one covering Venmo and consumer finance, and one for payments and crypto, TechCrunch reported. In May, he told investors PayPal needed to get back to "the fundamentals" and become "a technology company again," according to TechCrunch. The turnaround plan also calls for cutting the company's workforce by 20 percent over the next two to three years, TechCrunch reported.
PayPal was founded in 1998 by a group of entrepreneurs who later became prominent in Silicon Valley, including Peter Thiel, Elon Musk, Max Levchin and Luke Nosek, according to TechCrunch. The company grew rapidly during the pandemic's e-commerce boom but has struggled since. Neither report said whether a final deal has been reached, and TechCrunch noted the talks could still fall apart.
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