PayPal shares climbed in premarket trade on reports that payments start-up Stripe and private equity group Advent International jointly offered to buy the company for more than $53 billion.
New York-listed PayPal shares jumped by close to 19% premarket to trade at $56.29.
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Privately-held Stripe and Advent tabled an offer to buy PayPal for $60.50 a share earlier this month, Reuters and the Financial Times reported, citing unnamed sources. The price is a near 28% premium to PayPal’s closing price Tuesday.
However, the value is a sharp discount to the stock’s $78.22 trading price at this time last year, and less than a fifth of PayPal’s July 2021 high of $308.52.
PayPal, Advent International and Stripe declined to comment on the reports.
Stripe and Advent would jointly own PayPal under the proposed offer, with each holding an equal stake, Reuters reported.
The challenge for buyers of PayPal will be fixing messy internal systems, while any acquisition could be a distraction for the already fast-growing Stripe, author of financial technology blog Fintech Brainfood Simon Taylor wrote on X.
An acquisition would help to significantly bolster Stripe’s consumer-facing business, Jefferies analysts wrote in a note to clients. Link, Stripe’s consumer arm, currently has more than 250 million users globally, compared to PayPal’s 439 million active accounts, the analysts said.
Thomas Hayes, chairman of investment-management firm Great Hill Capital, wrote on X that the reported offer undervalued PayPal given its strong free cash flow and improving margins. Even an offer of above $80 a share would present a steep discount to PayPal’s potential value, Hayes added.
Great Hill Capital holds a 0.06% stake in PayPal, according to LSEG.
Write to Joe Stonor at [email protected]
