Jefferies comments on reported Stripe-Advent bid for PayPal

Jefferies analysts have weighed in on a Reuters report that Stripe and private equity firm Advent International are working on a $60.50 per share takeover offer for PayPal (NASDAQ: PYPL), representing a 28% premium to the company's most recent closing price.

The reported deal values PayPal at approximately $53bn, implying a 2027 estimated price-to-earnings multiple of 9.5x and an EV/EBITDA of 8.5x. According to the Reuters report, Stripe and Advent would each own equal stakes in PayPal, with a consortium of banks said to have committed $50bn in financing. No company has publicly commented on the report.

Jefferies analysts said they believe a potential Stripe-PayPal combination would focus on the consumer side of the business, including PayPal's Link, Venmo, and checkout button products, rather than the merchant side. PayPal currently has 439 million active accounts, while Stripe's Link product has more than 250 million users globally.

On implications for Adyen (AMS: ADYEN), Jefferies said it views a potential combination as neutral over the medium term, given Adyen's established position in enterprise and in-store commerce. The analysts noted the deal could lead some merchants to switch to Adyen, which focuses solely on merchant services.

Jefferies also noted that PayPal's Braintree unit, despite facing recent pricing challenges, would add approximately $600bn in total payment volume to Stripe's enterprise business.

The analysts added that such a transaction could provide a valuation floor for the broader payments sector if companies are able to deliver on their financial targets.

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