By Milana Vinn and Manya Saini
Aug 28 (Reuters) - PayPal shares fell 13% in morning trading on Friday, after reports that a consortium of buyout firm Advent International and payment processor Stripe had abandoned plans to buy the fintech pioneer.
The group is no longer pursuing a deal for PayPal, a person familiar with the matter said, requesting anonymity to discuss confidential information.
The two had made a $60.50-per-share, or about $53 billion, offer for the payments company that was once seen
as the crown jewel of American financial technology, Reuters reported in July, citing sources.
The offer was a fraction of the roughly $360 billion valuation PayPal commanded at the height of the pandemic-era boom in 2021. The company's board considered the initial offer inadequate, sources have said previously.
"The consortium and PayPal ultimately did not see eye-to-eye on the value of the business. Add to that the regulatory challenges that a transaction of this size would likely face, and it appears Stripe may have decided the juice wasn't worth the squeeze," said Troy Hooper, co-head of ECM US at Mergermarket.
"Ultimately, valuation and regulatory complexity appear to have been the more important factors."
Bloomberg News was the first to report that the Advent-Stripe consortium had abandoned its buyout plans.
PayPal had a market capitalization of about $53 billion as of last close, roughly in line with the consortium's offer price. The shares have gained nearly 30% since Reuters reported on the bid.
The stock has cratered as the company has struggled to regain its footing after the pandemic-fueled surge in online shopping and digital payments faded and customers returned to brick-and-mortar stores.
Intensifying competition from tech giants Apple and Google, which have expanded their digital payment services by integrating them into smartphone ecosystems, eroded the company's core market share.
Over the years, PayPal has responded to the challenges with sweeping changes, including management reshuffles, workforce reductions and a renewed focus on higher-margin products.
Last month, the company doubled down on its turnaround plan, raising its 2026 profit forecast and outlining cost-saving steps under newly appointed CEO Enrique Lores.
The market has largely reserved judgment, with analysts saying investors are unlikely to embrace another multi-year turnaround plan until they see a meaningful acceleration in growth.
PayPal continues to trade at a discount to its peers, with a forward price-to-earnings ratio of 10.85 versus an industry median of nearly 15, according to data compiled by LSEG.
In the recent earnings call, Lores did not comment on the takeover speculation but said PayPal would carefully consider any opportunity or strategic option that it believes could create superior value for shareholders.
(Reporting by Manya Saini in Bengaluru and Milana Vinn in New York; Editing by Shilpi Majumdar)
