Carl Icahn has reached a deal with eBay. The company will expand its board of directors and include Icahn Capital executive Jonathan Christodoro.
The move comes ahead of a planned breakup for the struggling company which is to come later this year. Its PayPal is being made more independent for either a spin off or to make it more attractive for sale.
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Icahn, a major eBay investor, had taken issue with how its board was directing the company. As part of the new deal he received assurances that any poison pill adopted by PayPal will not have a trigger below 20% and, if not ratified by stockholders within 135 days of adoption, PayPal will not have a staggered board, PayPal’s charter documents will not contain any super-majority voting provisions and if a person or group obtains majority control of PayPal, shareholders will be permitted to remove and replace directors at a special meeting.
Icahn released a statement saying, “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.”
“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.”
John Donahoe, President and CEO of eBay Inc., said “We are pleased to reach an agreement with Carl Icahn and to add Jonathan to the board. This agreement reflects our alignment on separation and our shared belief in the benefits of avoiding distractions. We look forward to contributions of all of our directors as we work to set up eBay and PayPal for success and create strong boards for each of the new companies.”