PayPal’s Board Thinks Stripe And Advent’s $53 Billion Offer Is Too Low. The Rejection Could Set The Stage For A Bigger Bid.

PayPal's board believes the $53 billion takeover proposal from Stripe and Advent International does not adequately value the payments giant even as the offer ranks among the largest technology acquisition attempts in recent years, according to a new report.

The board has not formally responded to the unsolicited bid and is continuing to evaluate the proposal alongside PayPal's ongoing turnaround efforts, people familiar with the matter told Reuters. Directors are also considering whether additional offers could emerge as they review the company's strategic options. The outlet added that the board's initial assessment is that the $60.50-per-share offer does not fully reflect PayPal's long-term value despite representing a premium over its recent trading price.

PayPal has faced increased competition from digital wallets offered by Apple and Google, while Stripe has expanded aggressively in merchant services and financial infrastructure. Financial Times noted that a combined Stripe-PayPal entity would bring together Stripe's merchant payments business with PayPal's consumer brands, including Venmo.

Stripe and Advent submitted their offer earlier this month, valuing PayPal at more than $53 billion. The proposal is backed by approximately $50 billion in financing commitments from JPMorgan and Morgan Stanley, while Stripe and Advent are contributing roughly $17 billion in equity.

PayPal's board is weighing several factors beyond the purchase price, including the certainty of financing, potential regulatory hurdles and the expected timeline required to complete a transaction. Additional board meetings are scheduled as directors continue their review, according to Reuters.

The consortium has attempted to address antitrust concerns tied to combining two major payments platforms. One option under consideration involves separating PayPal's Braintree payments processing business and transferring it to Advent if regulators require remedies, according to people familiar with the discussions cited by Reuters. Advent owns stakes in several payments businesses, including Nuvei, and has previously invested in companies such as Worldpay and Vantiv.

The offer follows an initial approach made in April by Stripe, Advent and Block. Block subsequently exited the consortium before Stripe and Advent submitted their latest proposal.

Investor attention has increasingly shifted to PayPal's efforts to stabilize its core checkout business. The company is scheduled to report earnings on July 28 after previously issuing weaker-than-expected guidance and warning about slowing momentum in its checkout segment, according to Reuters. PayPal shares rose sharply following news of the takeover approach earlier this week before retreating modestly in subsequent trading. Business Insider reported that the stock gained approximately 15% after details of the bid became public.

The transaction would rank among the largest deals in the fintech sector if completed. Combined, Stripe and PayPal process an estimated $3.7 trillion in annual payment volume, according to Reuters. Stripe was most recently valued at approximately $159 billion in a February employee tender offer, while PayPal has spent recent years attempting to recover from a steep decline from its pandemic-era valuation highs.