Carl Icahn On eBay Inc (EBAY) Agreement

Carl Icahn On eBay Inc (EBAY)  Agreement
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Carl Icahn On eBay Agreement by Carl Icahn, Shareholders’ Square Table


New York, New York, January 21, 2015 – Today Carl Icahn released the following statement regarding eBay Inc.:

Today we entered into an agreement with eBay whereby one of our representatives, Jonathan Christodoro, will join eBay’s board of directors and have the ability to transition to PayPal’s board once the spin-off occurs. eBay also agreed that PayPal’s charter documents will contain a number of corporate governance provisions that we suggested and which we believe will greatly enhance shareholder value at PayPal.

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We believe the actions of eBay’s board and management in crafting this agreement with us have marked a large step forward for corporate governance. The company reached out to us recently to discuss value enhancement generally, and our constructive conversations led to the mutual development of a governance structure going forward that we believe will better align the interests of shareholders, directors, management and other stakeholders.

We have worked assiduously with eBay and its advisors over the last few days and we are optimistic that PayPal will benefit greatly from the following corporate governance provisions:

  • Any poison pill adopted by PayPal will not have a trigger below 20% and, if not ratified by stockholders within 135 days of adoption, will automatically expire (therefore, if a bid is made, the company may adopt a pill but it will expire in 135 days if not ratified by shareholders and the company can use the 135 days to find a better offer and/or convince shareholders not to tender);
  • PayPal will not have a staggered board;
  • The holders of 20% of the outstanding shares of PayPal will be permitted to call special meetings of shareholders;
  • If a person or group obtains majority control of PayPal, shareholders will be permitted to remove and replace directors at a special meeting;
  • PayPal will opt out of the “interested stockholder” provisions of Section 203 of the Delaware General Corporation Law;
  • PayPal’s charter documents will not contain any super-majority voting provisions;
  • PayPal will not adopt any other change-of-control provisions (e.g., poison puts or severance plans) with triggers below 20%; and
  • If PayPal’s board rejects an unsolicited offer for the company in favor of another bid, and permits the second bidder to conduct diligence, then the board must also grant the first bidder the right to conduct due diligence if that bidder increases its offer above the second bid.

As we have said many times in the past, we believe that if an offer is made for a company it should be the decision of the shareholders – not the board – to decide whether that offer is worth accepting. Obviously the directors have every right to, and should, advise shareholders not to accept an offer which they believe undervalues the company. But in the end it should be the shareholders’ decision. This fundamental belief was the underlying philosophy of many of the corporate governance principles for which we advocated at PayPal. We applaud eBay’s board for making this agreement possible and we look forward to a long and productive working relationship.

I believe that, following the spin-off, eBay and PayPal will both be well-positioned to take advantage of multiple opportunities. Jonathan Christodoro serves as a director on companies such as Hologic, Inc., Talisman Energy Inc., and Herbalife Ltd., where he has worked constructively and congenially with his fellow board members for years. As a member of the eBay and PayPal boards, Jonathan will work cooperatively with the other directors and the management teams in an attempt to enhance the value of both companies for all shareholders. Our record shows that our involvement on boards has often created meaningful value for all shareholders. We hope and believe this will continue with eBay and PayPal.”

Contact: Susan Gordon: (212) 702-4309

Follow me on twitter: @Carl_C_Icahn

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