Icahn Says He'll Fight eBay Proxy Battle If He Has To

Jan 24 2014 | 1:29pm ET

Carl Icahn said yesterday that he is ready to fight to force eBay to spin-off its PayPal unit.

The online marketplace said this week that Icahn had called for it to split from the online payments business it bought in 2002, and that the activist investor had nominated two employees of his Icahn Enterprises to its board. Icahn is also pushing an unusual non-binding shareholder vote on his proposal.

eBay quickly dismissed Icahn's proposal.

"The company seems to be sort of dug in on the fact they don't want to do the PayPal spinoff," Icahn told The Wall Street Journal yesterday. "We hope we don't" have to fight a proxy battle, he added, "but if we have to, we will."

Icahn added that an independent PayPal might be scooped up by a buyer, which would "make it even better for shareholders."

"It's a shame to have it held back by eBay and that I think is what's happening."

Icahn recently bought a roughly 2% stake in eBay, Reuters reports. He has nominated Icahn Enterprises' Jonathan Christodoro and Daniel Ninivaggi to eBay's board.

Icahn, who called the PayPal spin-off a "no brainer," also issued a new missive on another investment that merits that term. In a letter to his fellow Apple Inc. shareholders, he offered his harshest appraisal yet of the company's board and management, which have resisted his calls to increase its share buyback program.

"The directors are actually performing a great disservice to the owners, especially smaller shareholders who may not be in a position to buy more stock themselves," he said.

"It is important to note that a share repurchase is not simply an act of 'returning capital to shareholders' since it is also the company effectively making an investment in itself," he added. "To us, as long-term investors, this is an important difference." And he took a shot at the board, noting that "no one" on it "seems to be an expert in the world of investment management."

Icahn this week announced that he had increased his stake in Apple to more than $3 billion.


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