The proposal is backed by approximately $50 billion in committed financing. The reported offer comes after PayPal posted solid financial results and pursued AI-driven cost savings, although its stock closed 0.59% lower at $47.37 before edging slightly higher in after-hours trading.
Stripe Makes $53B Bid for PayPal
PayPal stock is being watched closely after reports that payments giant Stripe and private equity firm Advent International submitted a joint proposal to acquire PayPal Holdings in a deal valued at more than $53 billion.
According to people familiar with the matter, the consortium offered $60.50 per share, which is a premium of roughly 28% over PayPal's recent closing price. The proposal was reportedly submitted earlier this month, and is backed by around $50 billion in committed financing from banks.
The latest approach follows an initial proposal that was made in early April. Sources said Stripe and Advent are still waiting for a response from PayPal's board and hope to move discussions forward in the coming weeks. Under the proposed structure, the two firms would each own a 50% stake in PayPal rather than splitting up the business.
The acquisition interest comes as PayPal has been delivering a solid financial performance. During the first quarter, the company reported revenue of $8.35 billion. This beat analysts' expectations of $8.05 billion. Total payment volume also increased 8% year over year on a currency-neutral basis to approximately $464 billion.
PayPal has also been pursuing operational improvements through artificial intelligence. Management previously announced plans to streamline operations and reduce duplication in the organization, with expected cost savings of around $1.5 billion over the next two to three years. The company plans to reinvest those savings into future growth initiatives.
Meanwhile, Stripe is one of the world's most valuable privately held fintech companies. The payments firm was valued at approximately $159 billion in a February tender offer, due to a sharp increase in investor confidence over the past year.
PayPal stock price over the past day (Source: Google Finance)
PayPal stock traded lower during Monday's regular session, and fell 0.59% to close at $47.37, according to Google Finance. Shares spent most of the day under pressure before recovering some losses in the afternoon. However, sentiment improved after the closing bell, with the stock edging higher by around 0.06% in after-hours trading to $47.40.
While the reported takeover offer has yet to be reflected in the chart, investors will be closely watching the next trading session to see whether the proposed acquisition leads to a rally toward the reported offer price.
