PayPal reportedly offers to buy Pinterest for $45 billion

PayPal’s offer represents a 26% premium to Pinterest’s closing price of $55.58

PayPal Holdings Inc has offered to buy digital pinboard site Pinterest Inc for $45 billion, people familiar with the matter said on Wednesday.

PayPal has offered $70 per share, mostly in stock, for Pinterest, one of the sources said. The online payments provider hopes to successfully negotiate and announce a deal by the time it reports quarterly earnings on Nov. 8, the source added.

The sources cautioned that no deal was certain and terms could change. They asked not to be identified because the matter is confidential.

Bloomberg News first reported on the PayPal-Pinterest talks on Wednesday.

PayPal’s offer represents a 26% premium to Pinterest’s closing price of $55.58 on Tuesday. PayPal’s shares dropped more than 4% on the news, while Pinterest gained more than 14% to $63.51.

The combination would be a significant positive for PayPal’s ongoing monetization initiatives on both sides of its merchant and consumer platforms, especially if Pinterest’s social commerce platform gets integrated with Honey’s AI into PayPal’s destination app, Wedbush analysts wrote in a note.

The payments behemoth was among the big winners of the COVID-19 pandemic, as more people used its services to shop online and pay bills to avoid stepping out. Its shares have risen about 36% in the last 12 months, giving it a market capitalization of nearly $320 billion.

Pinterest also saw a huge spike in users looking for crafts and DIY project ideas, as lockdown curbs kept people at home.

As lockdowns eased, Pinterest has warned about slowing user growth, especially in the United States, its largest market.

Pinterest was valued at about $13 billion when it went public in 2019.

The company is at a crossroads after co-founder Evan Sharp announced last week he would step down as chief creative officer to join LoveFrom, a firm led by Jony Ive, the designer of many Apple Inc products.

Sharp founded the online scrapbook and photo-sharing platform with Ben Silbermann, who is the San Francisco, California-based company’s chief executive officer, and Paul Sciarra, who left in 2012.

PayPal had been looking to boost its e-commerce offerings in recent years through acquisitions. It bought online coupon finder Honey Science in 2019 for $4 billion and Japanese buy-now-pay-later (BNPL) firm Paidy for $2.7 billion earlier this year. It acquired return-service provider Happy Returns in May.