Stripe and Advent drop $53 billion PayPal bid, shares tumble

A consortium led by Stripe and the buyout firm Advent International has abandoned its pursuit of PayPal, Bloomberg News reported on Thursday, citing people familiar with the matter. Had it completed, the transaction would have ranked among the largest acquisitions in the payments industry.

The group had offered $60.50 a share, valuing PayPal at more than $53 billion. That was pitched in July, when PayPal was trading near historic lows and carried a market value of about $40 billion, and it represented roughly a 28% premium to the share price at the time.

PayPal rejected that offer, and the Stripe group was reported to be preparing a higher one. What changed in the meantime was PayPal itself: the company’s most recent quarter beat most analyst estimates, and that result, combined with the takeover speculation, pushed the stock up by about 40%. The rally raised the effective price of any deal and made a leveraged buyout harder to finance.

The market reaction to the withdrawal was immediate. PayPal shares fell as much as 16% in premarket trading on Friday after the Bloomberg report, giving back a large part of the gain that the takeover speculation had produced.

Neither Stripe, Advent nor PayPal has publicly confirmed the account, which rests on unnamed sources. The reported terms and the reasons for the withdrawal should be read as a news report rather than a company statement.

This article is a market report, not investment advice.