The eBay board has written to shareholders calling on them to vote against activist investor Carl Icahn's proposal to spin off PayPal.
In January Icahn began making his very public case for PayPal to be hived off from eBay, arguing that the auction site was hampering the growth and competitiveness of its payments subsidiary.
Last week, in the face of aggressive push back from the eBay board, he changed tack and proposed selling off 20% of PayPal in an initial public offering.
However, in a letter to shareholders the eBay board has reiterated its stance ahead of the company's annual meeting on 13 May, urging them to vote against his spin off plan and his bid to have two employees added to the eBay board.
"We have evaluated carefully Mr. Icahn's proposal to spin off PayPal. We do not support it. Mr. Icahn's proposal is not a new idea, and Mr. Icahn himself recently backed away from supporting his own proposal," says the letter.
Over the last five years, notes the firm, PayPal and eBay have generated a 441% increase in share price for investors, significantly outpacing Nasdaq and the S&P.
Says the letter: "Our shareholders and our customers are best served by keeping PayPal and eBay together. No other payments competitor has achieved PayPal's success - because no other competitor has had a commerce platform like eBay.