Stripe abandons $50bn pursuit of PayPal

A consortium of buyout firm Advent and Irish-founded payment processor Stripe has decided to abandon its pursuit of PayPal, a potential deal that would have ranked as one of the biggest-ever leveraged buyouts, according to people familiar with the matter.The group is no longer pursuing a deal for PayPal, the people said, asking not to be identified because the information is private. It had previously offered more than $50 billion (€43 billion) for the company, people with knowledge of the matter have said.PayPal shares tumbled as much as 16 per cent in premarket trading on Friday. Representatives for Advent, PayPal and Stripe declined to comment.Founded in the late 1990s, PayPal was an early mover in digital payments. It has since struggled with modernising its payment technologies as rivals such as Apple and Alphabet have seized market share.Bloomberg reported in February that Stripe, which was founded by Limerick-natives Patrick and John Collison, was considering an acquisition of parts or all of PayPal after a stock slump wiped out a chunk of its value.[ Stripe hits the acquisition trail, but will it work?Opens in new window ]The takeover interest, coupled with second-quarter earnings that topped analyst estimates, has helped it recover. PayPal shares have jumped more than 40 per cent this quarter, giving the company a market value of about $52.6 billion.San Jose, California-based PayPal ousted former chief executive Alex Chriss earlier this year and replaced him with Enrique Lores, who took over the role in March. Lores said he’ll set specific financial goals for PayPal, change how the payments company reports earnings and assign each line of business a specific revenue target to give investors a better sense of their potential.The Wall Street Journal reported this month that PayPal had found Advent and Stripe’s initial bid insufficient and the two sides were negotiating a potential higher price.Advent and Stripe could opt to come back at a later date if the situation changes.Stripe has separately been pushing deeper into the infrastructure powering the artificial intelligence boom. Earlier this month, it agreed to buy OpenRouter, a fast-growing gateway that provides access to hundreds of AI models. – Bloomberg