Paypal abandons Pinterest takeover after its shareholders balk

Paypal abandons Pinterest takeover after its shareholders balk

PayPal Holdings Inc. backed off a potential $40-billion-plus takeover of Pinterest Inc. after the payments company’s shareholders balked.

PayPal said in a statement late Sunday that it was “not pursuing an acquisition of Pinterest at this time.” The deal, talks for which leaked last week, would have combined a payments giant with broad financial ambitions and an image-sharing site that has struggled to fully capture the benefits of its role in e-commerce.

PayPal shares fell almost 12% in three days after the possible deal surfaced, a sign that investors doubted its wisdom. They closed up 2.7% Monday. Pinterest shares plunged about 13% after initially surging last week.

A deal for Pinterest, with a market capitalization of more than $37 billion, would have been one of the biggest mergers of the year and PayPal’s largest ever.

PayPal’s board and management decided Sunday to back away after determining the decline in the shares, along with other issues in the early-stage talks, would make coming to an agreement unlikely, people familiar with the matter said. With a lower share price, PayPal may have had to hand a larger portion of ownership to Pinterest investors in a stock deal, something that would further frustrate its own shareholders…Read more>>

Source:-foxbusiness

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