Cantor sees potential for higher PayPal offer as analysis suggests $70/share value

Investing.com -- In a note to clients on Thursday, Cantor Fitzgerald published a sum-of-the-parts analysis suggesting a potential PayPal acquisition offer could be raised to approximately $70 per share, above the reported $60.50 per share bid.

Cantor referenced recent media reports from CNBC indicating a consortium of bidders, including Stripe, Block and Advent International, is teaming together to purchase PayPal for approximately $53 billion, or $60.50 per share.

While the firm said it does not have independent confirmation of the details, it assessed the key question of whether the “proposed amount is enough to get a deal done?"

To address this, Cantor analyst Ramsey El-Assal modeled estimated earnings contributions from PayPal's primary businesses, including Venmo, Branded, Unbranded/Braintree, and Other P2P.

The firm first built a "Deal" case backing into the assumptions supporting the existing $60.50 per share bid, then constructed a peer-multiple-based sum-of-the-parts analysis implying "perhaps a ~$70/share offer might more fully reflect the intrinsic value of the company."

Cantor also flagged potential downstream impacts on the broader payments ecosystem should the transaction proceed.

The firm noted PayPal's business model relies on processing partners, including Global Payments and Fiserv, which are competitors to Stripe.

Cantor added that Synchrony issues and processes the PayPal Mastercard credit card, while The Bancorp Bank issues and processes PayPal and Venmo debit cards, noting Stripe is a smaller competitor to these providers on the card issuer processing side.

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