Global Market: PayPal takeover talks intensify as board mulls improved bid

PayPal Holdings is at a defining moment in its nearly three-decade history as the digital payments pioneer evaluates a $53 billion takeover proposal from rival Stripe and private equity firm Advent International, according to Reuters.

The company's board is discussing the offer but believes the proposed price of $60.50 per share does not adequately reflect PayPal's value, people familiar with the matter told Reuters.

The bid marks a dramatic shift for a company that was once among Wall Street's most highly valued technology firms. Founded in 1998 and acquired by eBay in 2002 before spinning off as an independent company in 2015, PayPal's market capitalisation peaked at around $360 billion in 2021 as digital commerce boomed.


Since then, however, slowing growth, rising competition and unsuccessful turnaround efforts have sharply eroded its market value.

Dealmakers are assessing whether PayPal's broad payments ecosystem—including more than 400 million consumer accounts, merchant checkout operations and assets such as the Venmo peer-to-peer payments platform—could be worth more if separated into individual businesses rather than retained as a single company.

Turnaround efforts yet to deliver
Earlier this year, PayPal acknowledged that its pace of execution had fallen short of board expectations while announcing leadership changes. Enrique Lores assumed the role of chief executive in March and has not publicly commented on the takeover proposal.

Analysts said that PayPal failed to capitalise on several major industry shifts while competitors rapidly expanded their offerings. Rivals including Apple, Google, Samsung, Stripe and Affirm introduced new payment options, digital banking capabilities and mobile-first services. At the same time, PayPal was slower to diversify beyond its traditional online checkout business.

Apple Pay has now overtaken PayPal in the U.S. digital wallet market, with research from PYMNTS Intelligence showing Apple Pay's market share exceeded PayPal's by 10 percentage points last year.

The company has also lagged competitors in adopting artificial intelligence and developing agentic commerce, where AI-powered assistants can complete purchases on behalf of consumers.

Analysts cited by Reuters said PayPal focused heavily on capturing market share through aggressive pricing, but that strategy came at the expense of profitability. Growth has also moderated across several businesses, including Venmo, while newer initiatives such as buy now, pay later have not generated the expected momentum.

PayPal's customer base has largely plateaued, shifting management's focus toward improving profitability from existing users rather than pursuing rapid customer growth.

Leadership churn and board scrutiny
PayPal has seen significant management turnover, with three chief executives in the past four years. The company launched its second turnaround effort since longtime CEO Dan Schulman stepped down in 2023.

Internal tensions emerged last year over a proposed partnership with OpenAI to integrate PayPal's digital wallet into ChatGPT. According to a technology executive familiar with the matter, the board asked management to delay the agreement, contributing to disagreements between directors and then-CEO Alex Chriss, who later departed following Lores' appointment.

Scope for a higher offer
Despite the ongoing discussions, PayPal's board is unlikely to endorse the current bid. Some directors are debating whether the proposal justifies opening formal negotiations, believing the company's latest turnaround strategy could ultimately support a higher valuation.

Wall Street analysts believe Stripe and Advent have the financial capacity to improve their proposal. The consortium has secured $17 billion in equity commitments and arranged approximately $50 billion in bank financing, providing room to raise the bid if necessary.

PayPal's upcoming quarterly earnings could prove pivotal. A weak earnings report may increase pressure on the company to engage with the bidders, while stronger-than-expected results could strengthen its negotiating position and encourage a higher offer.

Analysts at Morgan Stanley said the Stripe-Advent proposal currently represents the most credible route to unlocking value for shareholders, given PayPal's increasingly competitive digital wallet market and maturing customer base. They also see the likelihood of rival bidders emerging as relatively low.