Ebay and activist investor Carl Icahn settle proxy fight
The fight between activist investor Carl Icahn and eBay Inc. has been settled as the two sides have quietly reached a truce, Ebay said Thursday.
The two had been embroiled in a public spat over accusations by Icahn that two members of eBay’s board of directors had conflicts of interest and that the company had failed to get the full value for Skype, a video chat service, when it was sold.
Icahn also urged eBay to sell a minority stake in its PayPal unit to shareholders. He had originally demanded that eBay spin off the business, but he later softened his demand.
The fight played out publicly on social media and in blog posts, where eBay board of directors member Marc Andreesen had clashed with Icahn over his views.
“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,” eBay Chief Executive John Donahoe said in statement.
“As a result of our conversations, it became clear that Carl and I strongly agree on the potential of PayPal and our company. 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.
Under the terms of the agreement, Icahn has withdrawn his bid to separate the PayPal business and also pulled the names of two nominees for the board of directors.
Instead, the company will appoint David Dorman as an independent director on its board. Dorman is currently chairman of CVS Caremark Corp.’s board. He would be the 10th independent board member; the other two are eBay founder Pierre Omidyar, the company’s largest shareholder, and Donahoe.
Icahn has signed a confidentiality agreement, and eBay also agreed not to adopt a policy that would prohibit board members and certain executives from speaking to the activist investor to allow for candid conversations.
“Over the last week, I have had a number of conversations with John [Donahoe],” Icahn said. “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.”
