PayPal’s board has privately concluded that a $53 billion takeover offer from Stripe and private equity firm Advent International undervalues the company, according to people familiar with the matter.
The all-cash proposal, worth $60.50 per share, represents a 28% premium to PayPal’s unaffected closing price of $47.37. PayPal stock closed up around 2% on news of the bid, before slipping about 1.7% in premarket trading the following day. The stock was last trading around $56.56.
The board has not formally responded to the proposal. Its early view is that the offer does not fully reflect the value PayPal could create if management successfully executes its turnaround strategy.
Beyond price, the board is also weighing financing certainty, potential regulatory hurdles, and what could be a lengthy timeline to close any transaction.
To back the bid, JPMorgan and Morgan Stanley have provided the consortium with roughly $50 billion in financing. Stripe and Advent are contributing $17 billion in equity, with each set to hold an equal stake in PayPal if a deal goes through.
Block Inc. was initially part of the consortium when the group first approached PayPal in April, but exited before the latest offer was submitted.
Stripe processes roughly $1.9 trillion annually. Adding PayPal’s Braintree platform could push that figure closer to $2.6 trillion, and a combined entity would process an estimated $3.2 trillion — more than 30% of global e-commerce.
PayPal’s 231 million monthly active consumers, including 67 million Venmo users, would give Stripe consumer reach it currently lacks. Stripe’s Link wallet remains far smaller than PayPal or Venmo.
Owning both sides of the transaction could improve checkout conversion, fraud detection, and payment economics. Stripe could also cross-sell its billing, tax and financial products to PayPal’s merchant base.
Stablecoins add another layer. Stripe already owns Bridge and offers stablecoin services. PayPal brings PYUSD, which carries a market cap of around $3 billion.
Cantor Fitzgerald’s sum-of-the-parts analysis puts PayPal’s value closer to $70 per share — well above the $60.50 on the table. Analysts at Bernstein and Mizuho have also questioned whether the current offer would be enough to secure a deal.
PayPal generates roughly $6 billion in annual free cash flow and holds a net cash position, giving its board leverage to push for a higher number.
Regulators could also complicate matters. A combined Stripe-PayPal entity would account for over 30% of global e-commerce volume, likely drawing antitrust scrutiny. One possible remedy under discussion involves separating Braintree and transferring it to Advent.
Despite the board’s reservations, sources say Stripe and Advent remain the most serious bidders and are still seeking to reach an agreement.
PayPal’s next earnings report is due July 28.
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