PayPal dismisses $45 billion Pinterest takeover as "market rumour"

PayPal has denied reports that it is planning to acquire digital pinboard platform Pinterest.

Bloomberg was first to report the rumours on 20 October, having been told by people familiar with the matter that the two companies were involved in “late-stage talks”, with Pinterest reportedly being offered $70 per share, mostly in stock.

This would reportedly value the acquisition at $45 billion (£32.6 billion) – the highest amount paid for a social media company to date, surpassing Microsoft’s $26.2 billion takeover of LinkedIn in June 2016.

However, in a statement published on Sunday, PayPal described the reports as “market rumours”, adding that it “is not pursuing an acquisition of Pinterest at this time”.

The announcement caused Pinterest shares to drop more than 12%, while PayPal’s bounced back by 6%, after having slumped by 8% following the news of the potential acquisition.

Pinterest wasn’t immediately available for comment.

The news comes weeks after another high-profile acquisition cancellation: on 1 October Zoom called off its $14.7 billion (£11 billion) acquisition of cloud contact centre software provider Five9. The deal, which was expected to be the largest takeover for Zoom to date, was “mutually terminated” less than three months since it was announced due to Five9 failing to secure sufficient stockholder support.

The acquisition was voted down the deal in a shareholder meeting on Thursday, with the rejection being motivated by growth concerns as well as the dual-class shares: under the acquisition terms, Five9 shareholders would have received 0.5533 worth of Zoom shares for every Five9 share.

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21/10/2021: PayPal is in talks to acquire digital pinboard platform Pinterest for $45 billion (£32.6 billion), according to people familiar with the matter.

The deal is said to be in “late-stage talks”, confidential sources told Bloomberg on Wednesday, with Pinterest reportedly being offered $70 per share, mostly in stock.

If accepted, the deal would be the biggest acquisition of a social media company to date, surpassing Microsoft’s $26.2 billion takeover of LinkedIn in June 2016. PayPal is likely to announce the acquisition by the time it reports quarterly earnings on 8 November, according to one of the sources. However, the deal is still uncertain and its terms could be subject to change.

News of the potential acquisition caused Pinterest shares to surge by 12.8% to $62.68, with CEO Ben Silbermann's net worth skyrocketing by an estimated $400 million to $3.8 million. PayPal, on the other hand, saw its shares slump by 4.9% to $258.36 at closing. Neither company was immediately available for comment.

Founded in 2019, Pinterest allows users to “pin” posts, such as cooking recipes or decoration ideas, organise them into folders, as well as share them with friends. It makes its money by letting companies advertise their services through promoted posts.

PayPal’s interest in the social media platform stems from the shifting landscape of retail, with customers opting to buy products advertised by “influencers” – popular social media users with high rates of followers and engagement. The trend is seen across other social media platforms: in May 2020, Instagram and Facebook introduced Shops, which allow users to browse and purchase products directly from a business’ Facebook or Instagram profile, while TikTok’s partnership with ecommerce giant Shopify allows retail brands to link their product catalogues to the app.

Pinterest had previously been in talks to be acquired by Microsoft, but the deal fell through in February 2021 after Pinterest expressed a wish to remain independent. This was the second time that Microsoft had attempted to buy a large social media platform, following its failed bid to take over Chinese video-sharing app TikTok.