|
 Icahn withdrew his two nominees to eBay's board ahead of the
company's annual meeting in May. But in a concession to the famously
pugnacious activist investor, eBay added David Dorman, a founding
partner of investment firm Centerview Capital Technology, as a 10th
independent director.
The settlement caps a months-long acerbic war of words and marked a
reversal for Icahn, who had accused eBay Chief Executive Officer
John Donahoe of "inexcusable incompetence" and attacked the
company's board repeatedly for shoddy governance.
He appeared to soften his stance on Thursday, saying he found
several of Donahoe's ideas "compelling" and looked forward to
working with eBay's board.
In an interview with Reuters, Icahn said he might add to his eBay
holdings. He added that while he supported a PayPal split in the
near future, now was not the time.
"If they did the split-up now, yes, the stock would go up," Icahn
said. "But I am looking at it and think, 'Why do it now?' I think
the stock is very undervalued."
Icahn emphasized to CNBC that he "did not capitulate" to eBay. He
and Donahoe will meet regularly to discuss strategic alternatives
for PayPal, now eBay's fastest-growing business.
The billionaire told CNBC that his perspective shifted during talks
with major eBay shareholders who did not to see eye to eye with him
about a PayPal spinoff. They also threw their support behind Donahoe,
Icahn said.
Icahn, who owns more than 2 percent of eBay, also said he greatly
respected Dorman, a former AT&T Inc CEO and current chairman of CVS
Caremark Corp. Dorman has known venture capitalist and eBay director
Marc Andreessen for years.
"I am tickled pink to welcome my old friend David Dorman to the eBay
board!" Andreessen said in a tweet.
Shares of eBay tumbled 3.2 percent to $54.08 at Thursday's close,
during a selloff in tech stocks that drove the Nasdaq Composite
Index down 3.1 percent.
GOING UP AGAINST THE VALLEY
Icahn has successfully pushed for change at companies like Forest
Laboratories Inc, but has not always been able to replicate that
success in the technology sector.
Earlier this year, he failed to push Apple Inc to increase its stock
buybacks significantly, though the iPhone maker did accelerate share
purchases under an existing program in February.
[to top of second column] |
But he has also profited from his tech investments. When asked on
Thursday if he had made money on his eBay investment this year, he
said he would not argue that point. It's unclear, though, how much
Icahn made on his eBay stake. Since eBay first disclosed his
proposal on January 22, the stock has ranged from $54 to a high just
above $59 in March before sliding just below $54 late Thursday
afternoon.
With regards to Apple, Icahn said in January that he owned roughly
$4 billion of Apple stock, after adding to his position several
times during a very public campaign that began when he first
disclosed a stake in the company on August 13. At the time, Apple
was trading at about $467; it's now slightly below $524.
PayPal was founded in the late 1990s and went public in 2002. It was
acquired by eBay soon afterward for $1.5 billion. PayPal had 143
million active users at the end of 2013, up 16 percent from a year
earlier.
Icahn's push to carve off PayPal emerged in January during an eBay
conference call. Donahoe and board members, including founder Pierre
Omidyar, have repeatedly said eBay had been funding PayPal's growth,
and the two were better off together.
In the weeks after eBay disclosed Icahn's proposal, he wrote a
number of open letters to fellow shareholders questioning Donahoe's
abilities and calling corporate governance at the company among the
worst he had ever seen.
But by 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.
JPMorgan investment banker Jimmy Lee played a big role in clinching
the eBay settlement. Icahn credited the star deal-maker with helping
negotiate a ceasefire over a hectic weekend with considerable back
and forth.
Donahoe, who has been CEO since 2008, expressed relief that a
potentially bruising and distracting proxy fight had ended.
Icahn told Reuters that he does not expect there will be another
proxy fight with eBay after his year-long confidentiality agreement
ends next year.
(Reporting by Deepa Seetharaman in San Francisco, Phil Wabha and
Nadia Damouni in New York; editing by Edwin Chan, Lisa Von Ahn and
Jan Paschal)
[© 2014 Thomson Reuters. All rights
reserved.] Copyright 2014 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed. |
