NEW YORK – EBay Inc and Carl Icahn ended their proxy fight on Thursday as the activist investor dropped his proposal that the e-commerce company split off its PayPal payments unit and withdrew his two nominees for the eBay board.
Icahn in January called for the company to hive off its fast-growing PayPal business, arguing the unit is undervalued as part of eBay.
In the following weeks, Icahn, who controls about 2 percent of eBay, sent a series of open letters critical of Chief Executive Officer John Donahoe, the board, and corporate governance at the e-commerce company, which he said was among the worst he had seen.
Donahoe and board members, including founder Pierre Omidyar, have repeatedly urged shareholders to reject Icahn's proposal at the annual shareholder meeting in May, saying eBay and PayPal were better off together.
In mid-March, Icahn appeared to backtrack, calling on eBay to sell 20 percent of PayPal in an initial public offering, rather than do a full spinoff.
Icahn in a statement on Thursday said he was happy to have reached a point of detente with eBay, although he still believed the company should sell off PayPal. He also said Donahoe had agreed to meet regularly to discuss strategic alternatives for PayPal.
In a concession to Icahn, eBay will add David Dorman, a founding partner of investment firm Centerview Capital Technology, as an independent director to its board, the company said on Thursday.
Dorman is a former CEO of AT&T Inc and current chairman of drugstore operator CVS Caremark Corp.
EBay shares were down 0.9 percent at $55.38 in premarket trading.
(Reporting by Phil Wahba in New York; Editing by Lisa Von Ahn)