PayPal Holdings is in negotiations with payments group Stripe and private equity firm Advent International over a potential takeover, with the parties discussing a higher price after an initial offer was rejected, according to a report by the Wall Street Journal.
There report cites unnamed people familiar with the matter as highlighting that Stripe and Advent proposed paying $60.50 a share for PayPal in July, valuing the payments company at roughly $53bn. PayPal considered the offer too low, prompting further discussions over a potential improved bid.
An agreement could potentially be reached in the coming weeks, although there is no certainty that the talks will result in a transaction.
PayPal’s shares rose 1.8% on Friday following reports of the discussions, giving the company a market value of close to $53bn. Before the initial approach, the stock had been trading near historic lows and valued the company at about $40bn. Its market capitalisation peaked at more than $280 billion in 2021 during the pandemic-era surge in technology and online payments stocks.
The potential transaction comes as PayPal pursues a major turnaround under Chief Executive Enrique Lores, who took over in March after the company issued a profit warning. Lores, formerly chief executive of HP, has embarked on a restructuring programme that includes significant cost reductions and a reorganisation of PayPal into three business divisions.
The company has also said it intends to accelerate its use of artificial intelligence as part of the turnaround. In its latest earnings report, PayPal highlighted continued momentum at Venmo and Braintree, alongside growth in its debit card and buy now, pay later businesses.
The proposed acquisition would represent a significant expansion for Stripe, which is privately held and backed by investors including Sequoia Capital. Founded by brothers Patrick and John Collison, Stripe reached a valuation of $159bn earlier this year.
