Raider Icahn takes aim at eBay
25 February 2014, 20:35
New York - Corporate raider Carl Icahn took aim at eBay Monday, calling it to hive off payments unit PayPal while blasting its directors for conflicts of interest and its CEO as "asleep".
In a harsh attack on the online marketplace and auction site, Icahn said eBay needs to unleash PayPal to allow it to grow more aggressively to compete better in the online payments sector.
"We believe creating two dedicated and highly focused independent businesses would provide employees and stockholders the best opportunity to remain competitive over the long term," Icahn wrote in an open letter to the company.
"We hope that all eBay stockholders recognize that PayPal is at a critical point in its development and that the payments market is rapidly evolving around it."
Icahn's letter said his investment units, including Icahn Partners, Icahn Master and High River, have acquired 27.8 million shares of eBay, 2.15% of those outstanding.
He savaged the company's board, particularly directors Marc Andreessen and Scott Cook, as not working in the interest of shareholders, and said chief executive John Donahoe "seems to be completely asleep".
"How can Mr. Donahoe be the right person to make the strategic decisions necessary to achieve long-term value creation when he relies on his 'world-class board of directors' with competing interests that challenge their fiduciary responsibility to eBay stockholders?" Icahn said.
Icahn also nominated two of his employees to join the eBay board and called on other shareholders to support them.
The company quickly rebutted the letter, rejecting all of Icahn's arguments and criticisms as "mudslinging".
"As we are sure our other shareholders would agree, we prefer to engage in more constructive and substantive discussions of why, in our view, PayPal and eBay are better together," it said.
The company defended Donahoe as "widely respected" for engineering eBay's turnaround and Silicon Valley veterans Andreessen and Cook as "impeccably qualified" for their positions.