Advent and Stripe pull out: the 50 billion bid for PayPal falls through

It was set to be one of the most significant deals in recent years, involving a transaction worth over 50 billion dollars. Yes, it was set to be. Because the consortium formed by Advent International and Stripe has pulled out of the bid to buy PayPal. This decision brings to an end – at least for now – negotiations that would have resulted in one of the largest leveraged buyouts in history. The offer stood at $60.50 per share, valued at over $53 billion, according to a Reuters report in July. And it is no coincidence that, upon hearing the news, PayPal’s share price fell by as much as 16 per cent.

But let’s take a step back. It was 2021, and PayPal was worth around 360 billion dollars. The company, co-founded by Elon Musk, seemed like yet another American tech titan. Then, within a matter of months, it collapsed. So much so that the bid from Advent and Stripe, which was made in recent months, was worth less than a seventh of that figure.

PayPal is one of the companies that has been hit hardest by the post-pandemic period. The boom in e-commerce during the lockdown months had sent its share price soaring. The return to normality, however, has taken its toll. This is partly because, in the meantime, Apple Pay and Google Pay have secured a place in mobile wallets, Klarna and Affirm have taken the instalment payment sector, and Stripe and Adyen have secured the infrastructure behind retailers’ websites.

Of course, PayPal still has a recognisable checkout process, but one that is technologically outdated and difficult to modernise without disrupting existing integrations.

On 3 February, the board of directors replaced Chief Executive Alex Chriss with Enrique Lores, who had been chairman of the board since 2024 and had served as HP’s chief executive for six years. Chriss also stepped down from the board with immediate effect. Meanwhile, potential buyers were making their moves. Block, Stripe and Advent made a joint bid in April (though Block subsequently withdrew from the consortium before the offer was formalised). PayPal’s board deemed the proposal inadequate and cited regulatory and funding hurdles, without ever responding formally. The Wall Street Journal reported this month that the two sides were negotiating a higher price. In the meantime, however, the market had already done the buyers’ work: the share price rose by over 40 per cent during the quarter, bringing the market capitalisation to around 52.6 billion, compared with the 36 billion at the start of the year on which a 28 per cent premium had been calculated.