EBay, Icahn Strike Agreement, End Proxy Battle
EBay (NASDAQ:EBAY) ended its weeks-long proxy fight with activist investor Carl Icahn on Thursday in an agreement that keeps eBay and its PayPal e-commerce arm together.
The online marketplace agreed to add Icahn pick David Dorman as an independent director to its board.
In exchange, the activist dropped his bid for eBay to spin-off its PayPal e-commerce unit and pulled his two board nominations. Shareholders were set to vote on the candidates at eBay’s annual investor meeting on May 13.
“It’s a victory for eBay shareholders,” eBay CEO John Donahoe said in an interview with FOX Business’s Maria Bartiromo.
These actions, he said, will allow both PayPal and eBay to “grow faster” while capitalizing on “future trends” in e-commerce.
“Now is the time to focus on innovating and executing and we’re better at doing it together,” he said on FOX Business’s Opening Bell.
Dorman, 60, will be the 10th independent director on eBay’s 12-member board. The other two directors are eBay founder and chairman Pierre Omidyar and Donahoe.
Dorman is a founding partner of Centerview Capital Technology and former CEO of AT&T (NYSE:T).
He currently serves as chairman of CVS Caremark (NYSE:CVS), as well as on the boards of Yum Brands (NYSE:YUM) and as lead independent director of Motorola Solutions. He had previously served as chairman of Motorola from 2008 to 2012, before Motorola Mobility split off.
“Extremely pleased about agreement with eBay,” Icahn said in a post on Twitter (NYSE:TWTR). “Believe it's a win-win for ALL shareholders.”
The win follows an ugly spat between Icahn and the board of eBay during which he called the company’s leadership team “incompetent” and alleged that their incompetence cost shareholders $4 billion.
Donahoe and other eBay board members had urged shareholders to reject Icahn's proposal at the May meeting. In mid-March, Icahn changed his tune by calling for eBay to sell just 20% of PayPal, rather than a full spinoff.
Icahn, who upped his stake in San Jose, Calif.-based eBay to 2% in February, also agreed to sign a confidentiality agreement covering any non-public information that directors and certain officers of the company may share with him.
EBay is set to report earnings on April 29. The shares were down 1.7% to $54.95 in recent trade.