The payment service provider PayPal is apparently facing a large-scale takeover. Two investors have submitted a joint offer worth double-digit billions. The news immediately caused a jump in prices on the stock market.
53 Billion dollar offer for PayPal
The payment processor PayPal has received a takeover offer worth around 53 billion dollars (around 46 billion euros). The offer comes from the competitor Stripe and the company Advent International. The two companies plan to take over PayPal in equal shares. The offered price is $60.50 (around 53 euros) per share.
The offer includes committed bank financing of around $50 billion (around €44 billion). For shareholders, this means a premium of 28 percent on the closing price from last Tuesday. Investors reacted quickly on the stock market: PayPal’s share price rose by up to 18 percent in premarket trading. So far, management has not responded to the offer.
Like the news agency Reuters Citing Insider, the offer was submitted at the beginning of the month. A merger between the two financial companies would change the market for digital payments. While Stripe focuses on business customers, PayPal traditionally focuses on end consumers. However, both companies are increasingly penetrating each other’s markets.
Crisis at the payment giant
PayPal has been struggling with slowing growth and increasing competition for some time. The reason for this is, among other things, that alternative payment methods such as Apple Pay or Google Pay are continually gaining market share. PayPal’s market value fell from its peak of $360 billion (around 316 billion euros) in 2021 to around 42 billion dollars (around 37 billion euros) most recently. In the last twelve months alone, the paper lost 40 percent of its value.
In order to counteract the downward trend, managing director Enrique Lores initiated a comprehensive restructuring in the spring. The company was divided into three business areas in order to be able to operate more efficiently in the future. In addition, management plans to save around 1.5 billion dollars (around 1.3 billion euros) through internal optimizations in the coming years. However, previous attempts at realignment have not brought the desired financial success.
Stripe is expanding
In contrast to PayPal, Stripe is experiencing strong growth. The unlisted company was valued at $159 billion (around €140 billion) in a share placement in February. This corresponds to an increase in value of over 70 percent compared to the previous year. According to Reuters, negotiations are at an early stage and an agreement is currently still open. Stripe and Advent have not yet commented publicly on the plans.
