PayPal acquisition by Amex rumour surfaces again

PayPal Share PriceThere’s a rumour flying around once more that American Express might be interested in acquiring PayPal. It caused PayPal’s shares to spike almost to $40, the highest it’s been since a few days after their split from eBay.

PayPal President and Chief Executive Officer, Dan Schulman used to be Group President of Enterprise Growth at American Express which lends fuel to the rumours and certainly PayPal would be an attractive addition for the company.

One problem is of course the value of PayPal currently resting around $47.46B. Amex is valued at $57.07B so if it was a straight acquisition they’d have to raise a ton of cash to pay off PayPal’s shareholders. Of course they could be recompensed with joint Amex/PayPal shares but would PayPal investors think that a good deal for PayPal or would he prefer a deal that generated a cash payout?

While it’s all rumour, we know that the likes of Carl Ichan wanted to float PayPal off with their eye to a future merger or acquisition. There’s too much value in PayPal to leave well alone and let it do what it does best. Investors ultimately don’t care how well a company performs for it’s customers, they just want to see how much profit they can pillage for themselves.