EBay asks shareholders to veto Icahn's PayPal spin-off proposal

Tue Mar 25, 2014 7:11pm IST

Billionaire activist-investor Carl Icahn gives an interview on FOX Business Network's Neil Cavuto show in New York February 11, 2014. REUTERS/Brendan McDermid/Files

Billionaire activist-investor Carl Icahn gives an interview on FOX Business Network's Neil Cavuto show in New York February 11, 2014.

Credit: Reuters/Brendan McDermid/Files

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(Reuters) - EBay Inc (EBAY.O) urged its shareholders to vote against activist investor Carl Icahn's proposal to spin off the e-commerce company's PayPal payments unit.

Last week, Icahn asked eBay to sell 20 percent of the PayPal payments unit in an initial public offering, a change in tack from his previous call for a complete spin off.

"Our shareholders and our customers are best served by keeping PayPal and eBay together," eBay's board said in a letter to shareholders.

Icahn has said selling off only part of PayPal would retain the benefits of a stand-alone PayPal while maintaining the efficiencies of having eBay and the payments unit together.

EBay reiterated its stance that the company and PayPal were reliant on each other for growth, especially in "today's competitive environment."

"Our commerce and payments businesses reinforce and support each other. Taking them apart would destroy value by reducing their considerable synergies, which cannot be easily replaced by arm's length commercial agreements," the company said.

Shares of eBay were up 0.4 percent at $56.76 in early trading on the Nasdaq.

(Reporting by Soham Chatterjee; Editing by Savio D'Souza)

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