eBay has successfully fought off a bid by activist investor Carl Icahn to force a spin-off of the online flea market's PayPal subsidiary, with both sides calling a truce after a bitter four-month struggle.
Icahn is withdrawing both his proposal to separate the company's PayPal business and his two nominees to the company's board of directors, although he won a concession to appoint an ally in the form of David Dorman, a founding partner of Centerview Capital Technology and former chairman of Motorola, to the eBay board.
In a statement released to the SEC, Icahn says: "We are happy to have reached this détente with eBay and believe that Dave Dorman will be a great addition to the company's board of directors. As chairman of Motorola, Mr. Dorman, working in tandem with our board nominees, guided the company through the successful separation of its mobile device and home businesses, which greatly enhanced shareholder value."
As part of the deal, Icahn has agreed to sign a confidentiality agreement covering any non-public information that directors may share with him, although it does allow Icahn to discuss business progress with his nominee.
Says Icahn: "I am optimistic that this arrangement with eBay will enhance our ability to discuss large issues affecting the company with greater intelligence and will help to enhance shareholder value. I continue to believe that eBay would benefit from the separation of PayPal at some point in the near future and intend to continue to press my case through confidential discussions with the company."