Stripe and private equity firm Advent International have offered to buy PayPal Holdings in a deal worth more than $53 billion, according to people familiar with the matter.
The joint offer values PayPal at $60.50 per share, about 28% above the company’s closing share price on Tuesday.
The proposal, submitted earlier this month, is backed by about $50 billion in financing committed by banks, making it one of the biggest funding packages seen in a technology acquisition.
The people, who spoke on condition of anonymity because the talks are private, said Stripe and Advent first approached PayPal in early April.
They added that PayPal has not yet responded to the latest proposal, although the two firms hope to move discussions forward in the coming weeks.
If the acquisition goes ahead, Stripe and Advent would each own an equal stake in PayPal. The proposal does not involve breaking up the company.
PayPal, Stripe and Advent all declined to comment.
Investors reacted positively to the report as PayPal shares climbed 16.2% in pre-market trading.
PayPal was one of the companies that helped bring digital payments into the mainstream. However, it has found it difficult to keep pace as consumers turned to services such as Apple Pay and Google Pay, while newer financial technology firms expanded their presence.
The company’s market value reached about $360 billion in 2021 during the pandemic-driven boom. Since then, slowing growth and tougher competition have reduced its valuation.
Earlier this year, its market capitalisation fell to about $36 billion, and the stock has lost more than 40% of its value over the past year.
The company has also been restructuring its business under chief executive Enrique Lores, who took over in March.
In April, PayPal reorganised its operations into three divisions covering checkout, Venmo and consumer financial services, and payments and cryptocurrency. The company also made several management changes as part of a turnaround plan.
In May, Lores said PayPal would use artificial intelligence to simplify operations and remove duplicated roles across the business. The company expects those efforts to save about $1.5 billion over the next two to three years and plans to reinvest the savings to support future growth.
Despite its challenges, PayPal still reports steady business performance. First-quarter revenue rose 7% year-on-year to $8.35 billion, beating analysts’ expectations of $8.05 billion. On a currency-neutral basis, total payment volume increased 8% to about $464 billion.
For Stripe, acquiring PayPal would expand its reach into consumer payments through PayPal’s checkout services and Venmo, while strengthening its existing business serving merchants and enterprises.
Stripe, which is still privately owned, was valued at $159 billion in a February share sale, more than 70% higher than a year earlier.
Currently, companies across the global payments industry are seeking larger scale and stronger positions in faster-growing areas such as cross-border payments and business-to-business transactions.
Last year, Global Payments agreed to acquire Worldpay from FIS and GTCR in a $24.25 billion deal. Canadian payments company Nuvei also acquired Payoneer for $2.75 billion with backing from Advent International and other private equity investors.
Meanwhile, Mastercard is exploring the sale of a majority stake in its UK payments business, Vocalink, back to British banks following concerns over foreign ownership of critical financial infrastructure.
