Stripe And Advent Make a Play for PayPal – Digital Transactions
PayPal is in play, as rival payments player Stripe has made an offer to buy the 27-year-old company at a reported valuation of more than $53 billion, according to a report early Wednesday by Reuters.
The offer, at $60.50 per share, is backed by both Stripe and Advent International, a global private-equity firm. PayPal’s shares were up 16% on the news at mid-morning, reaching $55. Neither PayPal nor Stripe responded to requests for comment from Digital Transactions News.
The bid was reportedly presented to PayPal earlier this month and proposes equal ownership stakes for Stripe and Advent, according to the Reuters account, which adds the prospective buyers indicated no plans to disassemble PayPal.
PayPal replaced its chief executive in March, bringing in former HP executive Enrique Lores with a mandate to speed up growth. That move came after the departure of Alex Chriss, who had been CEO for two-and-a-half years. The company’s board had reportedly grown impatient with progress under Chriss, particularly in branded checkout, a feature in which PayPal processes transactions under its own brand rather than operating in the background.
The current offer follows an effort earlier this year by the two bidders to engage PayPal in acquisition talks, according to the Reuters report. “I do think it makes sense for PayPal to accept the offer. It is good for shareholders, who have seen share prices decline substantially this year, and face little prospect of improvement, as the restructuring is expected to take years,” notes Aaron McPherson, principal at the payments consultancy AFM Consulting, in an email message.
PayPal has seen its value shrink to a low at one point this year of $36 billion, 10% of its market capitalization in 2021. The company planned in May to cut roughly 20% of its workforce, which at the time totaled 23,800 employees, according to reporting at the time by Bloomberg and The Wall Street Journal.
Still, for its March quarter, PayPal posted an 11% rise in total payment volume, to $464 billion, on a 7% increase in payment transactions, to 6.5 billion. The popular Venmo peer-to-peer payment platform saw payment volume grow 14%, to $86.2 billion. Active accounts, however, rose just 1%, to 439 million.
