Stripe and Advent walk away from PayPal takeover

A consortium of the private equity firm Advent International and the payments company Stripe has abandoned its pursuit of PayPal, Bloomberg reported on August 28, citing people familiar with the matter. The group had offered more than $50 billion for the company in what would have ranked among the largest leveraged buyouts on record.

PayPal shares fell as much as 16 percent in premarket trading on the day of the report, reversing weeks of gains driven by takeover speculation, according to PYMNTS. Representatives for Advent, PayPal and Stripe all declined to comment.

PayPal had rejected the offer, expecting the consortium to return with a higher price, according to Quartz. The bidders walked away instead. A future approach remains possible if conditions change, the publication reported.

Bloomberg first reported in February that Stripe was weighing an acquisition of some or all of PayPal after a share slump cut the company’s value. The interest helped drive a recovery, with the stock gaining more than 40 percent over the quarter to give PayPal a market value of about $52.6 billion, up from roughly $36 billion earlier in the year. At its 2021 peak the company was worth about $360 billion. The consortium’s offer represented a premium of about 28 percent to the share price at the time it was made.

PayPal is midway through a turnaround under chief executive Enrique Lores, who took over in March after the board removed Alex Chriss. Lores has reorganised the company into three units covering checkout, consumer financial services and Venmo, and payments and crypto, and the company has said it plans to cut about 20 percent of its workforce.

The company reported second-quarter results on July 28 that beat estimates, with adjusted earnings of $1.38 per share against the $1.28 expected and revenue up about 5 percent to $8.68 billion. It raised full-year guidance to $5.38 per share at the same time.