Billionaire investor and eBay shareholder Carl Icahn has agreed to withdraw his proposal that eBay spin off PayPal, along with his two board nominations. The news comes after months of Icahn openly lampooning the e-marketplace’s top executives and their business decisions.
EBay Inc. and its most vexing shareholder, billionaire investor Carl Icahn, have negotiated an agreement that ends a proxy battle that has been ongoing since January. Icahn has agreed to withdraw his proposal that eBay spinoff its PayPal payments arm, as well as his two board member nominations. In return, eBay is appointing another executive, David Dorman, as an independent director to its board, which it says is at Icahn’s suggestion.
The news comes roughly one month before the e-marketplace’s annual meeting with shareholders on May 13.
“We are happy to have reached this détente with eBay and believe that Dave Dorman will be a great addition to the company’s board of directors,” Icahn says. “As chairman of Motorola, Mr. Dorman, working in tandem with our board nominees, guided the company through the successful separation of its mobile device and home businesses, which greatly enhanced shareholder value.”
As part of the truce, Icahn also signed a confidentiality agreement that eBay says covers “any non-public information that directors and certain officers of the company may share with him.” The e-marketplace giant adds that it will not preclude any of its staffers from speaking with Icahn if they so choose.
“As a result of our conversations, it became clear that Carl and I strongly agree on the potential of PayPal and our company,” eBay president and CEO John Donahoe says. “I respect Carl’s willingness to work together to drive sustainable shareholder value today and into the future. His record shows that he has done this with many other companies in the past.”
Icahn says that, in speaking with Donahoe over the last week, he’s “found a number of his ideas to be extremely compelling.” However, although both businessmen agree in the “great potential of eBay and PayPal,” Icahn says, “I continue to believe that eBay would benefit from the separation of PayPal at some point in the near future and intend to continue to press my case through confidential discussions with the company.” He says he will meet with Donahoe regularly to discuss alternative strategies for the payments firm.