eBay Inc. and Icahn truce on PayPal spin-off – for now

It has been a heated war of words over the past few months, as activist investor Carl Icahn has put pressure on eBay to spin-off PayPal from eBay Inc. eBay strenuously defended the claim strenuously and it seems, for now at least, that the union is secure.

“We are very pleased to have reached this agreement with Carl, settling proxy issues and enabling our board and management team to focus our full attention on a goal every shareholder agrees on – growing PayPal and eBay, and delivering sustainable shareholder value,” said eBay Inc. President and CEO John Donahoe.

“As a result of our conversations, it became clear that Carl and I strongly agree on the potential of PayPal and our company,” Donahoe said. “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.”

As part of the deal, Icahn has signed a confidentiality agreement that will allow him to company information and staff.

Icahn stated: “We are happy to have reached this d├ętente with eBay…
Regarding the confidentiality agreement, we have entered into similar agreements in the past with other companies and, as results show, they have worked with great success,” Icahn said. “I am optimistic that this arrangement with eBay will enhance our ability to discuss large issues affecting the company with greater intelligence and will help to enhance shareholder value.”

Icahn continued: “Over the last week I have had a number of conversations with John.We both strongly believe in the great potential of eBay and PayPal, and I have found a number of his ideas to be extremely compelling. However, 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. While John has made no commitments regarding such a separation, he and I have agreed to meet regularly when he is in New York to discuss strategic alternatives. We look forward to working with the eBay’s board of directors and management with a common objective of creating sustainable value for all shareholders. Our record shows that our involvement with boards and management has greatly enhanced long term value for all shareholders, and we hope and believe this will continue with eBay.”