PayPal Board Says $53 Billion Stripe-Advent Offer Undervalues the Company

PayPal’s board has told Stripe and Advent International that the $53 billion takeover bid they put forward on July 15 is too low, according to Reuters. For high-risk PSPs, the interesting part is not just the price: the talks now sit squarely on financing, antitrust, asset divestitures and how long regulators would take to sign off.

1. PayPal has not formally responded to the $60.50-per-share proposal yet, but the board’s preliminary view is that the offer does not fully capture the value management could create by completing its turnaround. The bid carries a 28% premium to PayPal’s share price before the approach became public.
2. Price is only one piece of the problem. PayPal directors are also looking at whether the buyers can complete the financing, how regulators would view the combination, and how long approval could take. Stripe and PayPal are two of the most widely used online payments platforms, and together they process about $3.7 trillion annually.
3. Reuters said Stripe and Advent are the “most serious bidder” to surface so far. The consortium has assembled roughly $50 billion in financing from J.P. Morgan and Morgan Stanley, which are also advising the bidders. Stripe and Advent would contribute $17 billion in equity and own PayPal equally rather than split it immediately.
4. Advent’s role matters because the firm has prior payments experience, including investments in Worldpay, Vantiv and Nuvei. That could matter in an antitrust review if regulators require the combined company to sell assets, since Advent could serve as the landing place for those businesses.
5. One possible remedy would be to separate PayPal’s Braintree operation or other businesses and transfer them to Advent. That would reduce overlap between Stripe and Braintree, both of which provide payment infrastructure to large digital merchants. Block initially joined Stripe and Advent in approaching PayPal in April but withdrew before the current offer was submitted.

For Stripe, the appeal is clear enough on paper: PayPal brings a large consumer network, the Venmo wallet and a recognizable checkout credential to Stripe’s merchant-processing stack. The catch is that the board now has to compare the certainty of a cash offer against the uncertain upside of CEO Enrique Lores’ turnaround, with PayPal’s July 28 earnings report set to give investors another data point on whether branded checkout is stabilizing.