According to sources, Stripe and the private sector Advent International had made a joint acquisition offer to PayPal earlier in July, with an estimated value of over $53 billion. Following the news, PayPal stock prices rose by more than 16 per cent, and M&As in the digital payment sector are expected to warm up.
An offer has been submitted, but no final agreement has yet been reached
Reports indicate that the acquisition proposal is supported by a commitment of approximately $50 billion from the bank. If the deal is made, Stripe and Advent will jointly hold PayPal.
According to the source, the parties had had a contact in April and had officially submitted the programme in July. PayPal has not yet responded to the two proposals, and the buyer hopes to move the negotiations forward by the end of this month.
However, there is still considerable uncertainty about the transaction. It was mentioned that no final agreement had yet been reached and that contacts did not necessarily evolve into formal acquisitions.
High stock prices and revaluation of paid assets in the market
Following news of the acquisition, investors quickly pushed up PayPal stock prices. The market has refocused its online closing operations, the Venmo platform and consumer networks covering over 430 million accounts.
If Stripe succeeds in acquiring PayPal, its business, which is dominated by commercial services, will be combined with PayPal's consumer payment network, further expanding its coverage in the area of digital wallets and online payments.
William Blair Analyst Andrew Jeffrey expressed doubts as to the acceptability of the current offer. In his view, PayPal ' s new CEO would not necessarily accept an offer that might be considered low.
M&A rumors point to industry integration
PayPal has been under pressure in recent years to slow growth and increase competition, with competitors including Apple Pay, Google Pay and other payment instruments. The firm's market value has fallen significantly from its peak during the epidemic period, and management is driving business adjustments.
In April of this year, PayPal re-categorized its operations into closed accounts, Venmo, and payment and encryption. The company received $8.35 billion in a quarter, and total payments at fixed exchange rates increased by 8 per cent to approximately $46.4 billion.
Stripe remains one of the highest unlisted financial technology companies in the global valuation, with an estimated value of close to $15.9 billion. If acquired, its business chart will be further extended to consumer payments, business services, Venmo and products related to encrypted payments.
Additional information:It was also mentioned that payment companies were competing for growth areas such as cross-border payments, business payments, stable currency services and faster digital trading networks through mergers and acquisitions.