The Scoop
PayPal isn’t currently in talks to sell itself — to Stripe or anyone else — and has been working for months with bankers to prepare for a potential activist campaign or unwanted takeover bid, according to people familiar with the matter.
The process followed a steep decline in PayPal shares that executives worried could leave the company vulnerable, the people said. Bankers began working with PayPal under former CEO Alex Chriss, who was ousted earlier this year. Bloomberg reported that Stripe is considering an acquisition of all or parts of PayPal this week. PayPal declined to comment. Incoming CEO Enrique Lores officially starts next week.
Know More
Quick sanity check: It’s hard for privately held companies, even big ones like Stripe, to buy a big public company — especially if it doesn’t want to be bought. Stripe can’t pay with its own shares, and would need rock-solid debt commitments to rebut any stiff-arm from PayPal.
The rare cases require messy workarounds, like the tracking stock that allowed privately held Dell to buy EMC in 2016. They also need the enthusiastic support of the company being acquired and deep pockets, both of which allowed Mars, the family-controlled food giant, to buy Kellanova last year for cash.
Stripe, which didn’t immediately return a request for comment, is likely interested in picking up PayPal’s massive customer base and utility-like payment rails. Any talks would require an end to PayPal’s interregnum.