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PayPal board views Stripe-Advent offer as undervaluing the company
The $60.50 per share bid faces financing and regulatory hurdles, with JPMorgan and Morgan Stanley providing about $50 billion in proposed financing and the consortium adding $17 billion in equity.
PayPal’s board is considering a $53 billion takeover bid from Stripe and private equity firm Advent International, and early internal views suggest the offer undervalues the U.S. payments company while also running into potential regulatory and financing hurdles, a person familiar with the matter told Reuters.
The board is weighing the bid against PayPal’s turnaround strategy, including the possibility that future offers could emerge. Its early view is that although the $60.50 per share price represents a premium to PayPal’s recent share performance, it does not fully reflect the value the company could create if management executes its plan.
PayPal shares rose about 2% after the offer emerged, Reuters said, and the company is scheduled to hold additional meetings. The board is also evaluating non-price factors, including the certainty of financing, potential regulatory hurdles, and the risk of a lengthy timeline to complete a transaction.
On the bidder side, JPMorgan and Morgan Stanley have provided the consortium with a roughly $50 billion financing package, and the consortium is contributing $17 billion in equity. Reuters added that the consortium has been considering possible antitrust remedies, including separating PayPal’s Braintree business or other assets if needed, according to sources.