There are going to be a lot fewer slings and arrows flying between Ebay Ebay and shareholder Carl Icahn, at least for a while, after the tech company and activist investor agreed to end their war of words.
In a press release Thursday morning the company said it reached an agreement with Icahn that would cut off a proxy fight that threatened to turn its upcoming shareholder meeting into something of a referendum on the billionaire's pitch for Ebay to spin off PayPal.
(AP Photo/Paul Sakuma) As part of the deal Icahn withdraws his proposal for the breakup and to add two of his nominees to Ebay's board, but he doesn't walk away empty-handed. David Dorman will be added to the Ebay board at the suggestion of Icahn, who had previous experience with the executive when he sat on the board of Motorola. Dorman, who also serves as chairman at CVS Caremark CVS Caremark, is a founding partner of Centerview Capital Technology.
Remarks from Donahoe and Icahn certainly make it sound as though the barbs slung between the billionaire, the company and board member Marc Andreessen are being set aside for the time being. (See "Icahn Rips Ebay Chief Donahoe.")
"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 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."
Icahn, who signed a confidentiality agreement to allow for more candid conversations with management, made it clear though that he still believes PayPal would be better off on its own.
"We are happy to have reached this détente with EBay," Icahn said. "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."
Backing off at Ebay marks the second time in the last year that Icahn's effort to force a big tech company into change has been deflected. Last year, Icahn used a barrage of social and traditional media to urge Apple Apple and CEO Tim Cook to return more of the iPhone-maker's cash hoard to shareholders. While Apple stopped well short of the $150 billion buyback Icahn initially demanded, the billionaire declared a form of victory when Cook acknowledged the company had accelerated its share repurchases in February.
Shares of Ebay were down 1.2% Thursday in pre-market trading.
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