PayPal takeover bid faces board resistance as Stripe-Advent offer deemed inadequate

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PayPal takeover faces resistance

Highlights

PayPal's board considers the $60.50-per-share Stripe-Advent takeover bid inadequate, citing undervaluation, deal risks, and unresolved regulatory issues.
JPMorgan and Morgan Stanley arranged approximately $50 billion in financing for the deal, with Stripe and Advent providing $17 billion in equity for joint ownership.
Regulatory concerns may force asset divestitures such as Braintree, while competitive and financing hurdles narrow the pool of bidders for PayPal.

Board review centers on valuation and deal hurdles

As first reported by Reuters, PayPal’s board views the $60.50-per-share proposal as not fully reflecting the company’s longer-term value, according to a person familiar with the matter. Two other sources say PayPal has not formally responded to the bid, while Stripe declines to comment.

The board is comparing the proposal with management’s standalone recovery plan and is also considering whether other bids could emerge. Beyond price, directors are weighing the certainty of financing, possible regulatory obstacles and the prospect of a lengthy closing process, with additional meetings scheduled, the source says.

The offer, submitted earlier this month, comes as PayPal tries to regain momentum after losing ground to rivals such as Apple Pay and Google Pay. Investors are watching the company’s July 28 earnings report for indications that growth in its core checkout business is stabilizing after weaker-than-expected guidance earlier this year.

Financing structure and payments sector impact

JPMorgan and Morgan Stanley have provided the bidding group with roughly $50 billion in financing, according to two people familiar with the matter, and the banks are also advising the consortium. Stripe and Advent are contributing $17 billion in equity, one of the people says.

Under the proposal, Stripe and Advent would jointly own PayPal with equal stakes rather than split up the company. The bidders have also considered remedies if antitrust concerns arise, including separating PayPal’s Braintree business or other assets and shifting them to Advent, which could combine them with payments investments such as Nuvei.

Despite PayPal’s reservations, the consortium remains the most serious bidder and is still interested in reaching an agreement, the sources say. The size of the transaction limits the field of potential buyers, while regulatory scrutiny could complicate interest from other strategic acquirers, even as assets including Venmo attract attention.

In our earlier coverage of Stripe and Advent’s $53 billion takeover proposal for PayPal, we noted that the $60.50-per-share valuation introduced a sizable acquisition premium and quickly shifted near-term sentiment in PYPL. The piece also highlighted that the post-bid rally pushed technical indicators into overbought territory, making resistance around the low-$60s a key level while traders weighed the likelihood of a deal or competing offers.

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