It looks like the battle between eBay and investor Carl Icahn is over — for the time being. Icahn is withdrawing his proposal to separate the company’s PayPal business as well as his two nominees to the company’s board of directors.
eBay reportedly reached an agreement with Icahn, ending the proxy contest before the upcoming annual meeting of stockholders.
The company said it has agreed to Icahn’s suggestion to appoint business executive David Dorman as an independent director to its board — a move which will expand the number of independent directors to 10 on the 12-member board. The other two directors are eBay founder and chairman Pierre Omidyar, the company’s largest shareholder, and company president and CEO John Donahoe.
Dorman is a founding partner of Centerview Capital Technology. He has more than 38 years of senior executive, operational, board and investment experience. He is currently chairman of the board of CVS Caremark. Dorman was a board member of Motorola beginning in 2006 and served as chairman of the board from 2008 until 2012. After the separation of Motorola Mobility and Motorola Solutions, Dorman became lead independent director of Motorola Solutions. He also serves on the boards of YUM! Brands and the Georgia Tech Foundation in Atlanta.
Prior to Centerview, Dorman was chairman and CEO of AT&T. During his tenure there, he led the company through a profound reinvention and transformation prior to completing the merger of AT&T and SBC Communications in November 2005. Dorman joined AT&T as president in December 2000 and was named chairman and CEO in November 2002.
“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 Donahoe. “As a result of our conversations, it became clear that Carl and I strongly agree on the potential of PayPal and our company. 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 has reportedly signed a confidentiality agreement covering any non-public information that directors and certain officers of the company may share with him. In addition, the company agreed not to adopt a policy precluding such persons from speaking to Icahn, and said that it would advise to speak to Icahn if they are willing to do so.
“We are happy to have reached this détente with eBay and believe that Dave Dorman will be a great addition to the company’s board of directors,” said Icahn. “As chairman of Motorola, Mr. Dorman, working in tandem with our board nominees, guided the company through the successful separation of its mobile device and home businesses, which greatly enhanced shareholder value.”
Regarding the confidentiality agreement, Icahn said that they have entered into similar agreements in the past with other companies, adding “as results show, they have worked with great success.”
“Throughout the last week I have had a number of conversations with John,” added Icahn. “We both strongly believe in the great potential of eBay and PayPal, and I have found a number of his ideas to be extremely compelling.”
He has not budged, however, in his belief that eBay would benefit from the separation of PayPal at some point in the near future and said he intends to continue pressing his case through confidential discussions with the company.
“While John has made no commitments regarding such a separation, he and I have agreed to meet regularly when he is in New York to discuss strategic alternatives,” said Icahn. “We look forward to working with the eBay’s board of directors and management with a common objective of creating sustainable value for all shareholders. Our record shows that our involvement with boards and management has greatly enhanced long term value for all shareholders, and we hope and believe this will continue with eBay.”
The company confirmed that its first quarter earnings call will take place at 2 p.m. PDT April 29, and that its annual meeting will be held at 8 a.m. PDT May 13.