Advent & Stripe Drop Pursuit of PayPal
Synopsis
A consortium of Advent International and Stripe walks away from its pursuit of PayPal after the fintech giant’s board called its bid inadequate.
Key Highlights
- Advent International and Stripe have dropped their bid to acquire PayPal.
- The consortium had offered $60.50 per share, putting PayPal’s value at more than $53 billion.
- The proposal was well below PayPal’s roughly $360 billion valuation at its pandemic-era peak in 2021.
- PayPal’s board considered the offer too low and had raised concerns over regulatory and financing obstacles.
Consortium Walks Away From Deal
A consortium involving buyout from Advent International and payment processor Stripe, has decided to stop pursuing an acquisition of PayPal, reported Thursday, as per sources.
Bid Nowhere Close to Previous Valuation
Reuters reported in July that Stripe and Advent had offered $60.50 per share for PayPal, valuing the company at more than $53 billion. That figure represented only a small portion of PayPal’s roughly $360 billion valuation in 2021, when the payments company was viewed as one of the major pandemic winners in fintech.
Board Called Offer Inadequate
PayPal’s board considered the takeover proposal too low and pointed to regulatory and financing obstacles, Reuters had previously reported. PayPal has not formally responded to the proposal.
Block, Stripe and Advent initially approached PayPal together in April. Block later withdrew from the consortium, leaving Stripe and Advent to make their offer.
PayPal’s Ongoing Turnaround Efforts
The bid came as PayPal, founded in the late 1990s, has struggled to keep pace with competitors such as Apple Pay and Google Pay. Management has been working to revive the company’s share price amid slowing growth.
After taking over as CEO from Alex Chriss in March, Enrique Lores began a strategy aimed at simplifying the business and putting greater emphasis on growth. In April, PayPal reorganized its operations into three divisions covering checkout, consumer financial services through Venmo, and payments and crypto, along with several management changes.
Source: Reuters
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