Pay Pal's $53 billion takeover bid spurs 18.7% pre-market rally
Shares of payment company PayPal soared 18.7% before the market opened on Wednesday after reports that financial technology company Stripe and private equity firm Advent International jointly submitted an acquisition offer to PayPal of US$60.50 per share, with an overall valuation of more than US$53 billion. The offer represents a premium of about 28% to PayPal's closing price of $47.37 on Tuesday. According to reports, the acquisition plan is backed by approximately US$50 billion in committed bank financing. Stripe and Advent will each hold 50% of the shares, rather than splitting the company. As a pioneer in the field of digital payments, PayPal was founded in the late 1990s and has faced increasingly fierce market competition in recent years. As competitors such as Apple Pay and Google Pay continue to seize share, the company's market value has shrunk significantly from its peak of approximately US$360 billion in 2021, with a closing market value of approximately US$41.7 billion on Tuesday. Chief Executive Officer Enrique Lores, who took over in March this year, has launched a comprehensive overhaul, splitting the business into three divisions and seeking cost reductions of about $1.5 billion. Acquirer Stripe, founded in 2010 by Irish brothers Patrick and John Collison, was valued at $159 billion through an equity offer in February. The company's revenue in 2024 will be approximately US$5.1 billion, an increase of 28%, and free cash flow will double to US$2.2 billion. According to reports, Stripe and Advent had preliminary contact in April this year and formally submitted an acquisition offer earlier this month. They have not yet received a response from PayPal and the two parties hope to advance negotiations within a few weeks. It is not yet confirmed whether the deal will be finalized.