Stripe and Advent Walk Away From $53 Billion PayPal Pursuit After Rally Prices Them Out
A 40% run in PayPal's shares left the consortium's $60.50-a-share offer stranded; the stock fell as much as 16% premarket once the biggest leveraged buyout in years was pronounced dead.
What Happened
A consortium of Advent International and Stripe has abandoned its pursuit of PayPal, Bloomberg reported on 28 August, ending what would have been one of the largest leveraged buyouts on record. The group had bid $60.50 a share on 15 July, a 28% premium at the time and more than $53 billion in total, only for PayPal’s board to reject the price as inadequate, with later reporting putting the board’s own number closer to $70.
The collapse came roughly two weeks after the parties rekindled negotiations that had first broken down in July. In the interim, PayPal’s stock had rallied about 40%, leaving the original offer well below where the shares traded and making a deal at a price the board would accept uneconomic. PayPal fell as much as 16% in premarket trading on the news.
Why It Matters
The market did the board’s negotiating for it. By rejecting $60.50 and letting the stock run, PayPal’s directors effectively raised the clearing price beyond what a leveraged structure could support. That is a vindication of the board’s stance, but it now leaves shareholders holding a stock that had been bid up on takeover hopes, as the premarket drop makes clear.
Mega-LBOs remain hard to finance at full prices. A $53 billion-plus take-private requires tens of billions in debt. With financing costs elevated and PayPal’s board anchored near $70, the maths stopped working for Advent and Stripe. The episode is a reminder that even deep-pocketed sponsors have a ceiling, and that public boards holding out for more can win, at the cost of a volatile share price.
Stripe’s strategic appetite is undimmed. Days before the PayPal talks ended, Stripe committed roughly $7.5 billion to buy OpenRouter. The company is clearly willing to deploy capital at scale; it simply will not overpay for a legacy platform when it can buy growth infrastructure instead.
- Valuation air pocket: PayPal shares had priced in a bid; without one, the stock must justify its level on fundamentals in a competitive payments market.
- Activist pressure: Having rejected $60.50, the board will face scrutiny if the stock settles materially below that level for an extended period.
- Strategic drift: Months of takeover speculation can distract management and slow product decisions at a company already facing share loss to newer rivals.
- Board discipline validated: Holding out for a higher price forced the market to reassess PayPal's intrinsic value upward.
- Optionality remains: A stronger share price and demonstrated buyer interest keep PayPal in play for a strategic acquirer with cheaper capital.
- Standalone catalysts: Freed from deal limbo, management can execute on turnaround initiatives without an overhang.
Source: Bloomberg