Key facts
- PayPal's board believes a $53 billion takeover bid from Stripe and Advent International undervalues the company.
- The board cited regulatory and financing hurdles as concerns regarding the offer.
- The consortium has secured approximately $50 billion in financing from JPMorgan and Morgan Stanley.
- Stripe and Advent are contributing $17 billion in equity to the proposed deal.
- Potential antitrust remedies include separating PayPal's Braintree business.
PayPal's board has deemed a $53 billion takeover offer from rival Stripe and private equity firm Advent International as inadequate, according to sources familiar with the matter. The board's preliminary view is that the $60.50 per share offer does not fully reflect PayPal's potential value if its management's turnaround strategy is successful.
Concerns also extend beyond price, with the board weighing financing certainty, potential regulatory hurdles, and the timeline for completing such a transaction. PayPal has not yet formally responded to the proposal, which was submitted earlier this month.
The consortium, comprising Stripe and Advent, has reportedly secured a roughly $50 billion financing package from JPMorgan and Morgan Stanley, with Stripe and Advent contributing $17 billion in equity. To address potential antitrust issues, the bidders have considered remedies such as separating PayPal's Braintree business.
Block was an initial partner in the consortium but exited before the latest offer was submitted. Investors are closely watching PayPal's upcoming July 28 earnings report for indications of stabilization in its core checkout business.