Tomahawk, WI 04/03/2014 (Basicsmedia) – The eBay Inc. (NASDAQ:EBAY), board has continued its battle against activist cum investor Carl Icahn, who not long ago suggested that eBay and PayPal should spinoff from each other.

The board of the company has constantly maintained that a spinoff would not be in the best interest for eBay and also informed its shareholders about their opinion. They have said that a PayPal spinoff would be deteriorating for both the companies in question.

Letter to shareholders

In a letter to the company’s shareholders, the eBay board said that keeping both companies together are in the best interest of both, the shareholders and also the company’s customers. They also mentioned the fact that no other competitor had achieved as much success in the payment platform as PayPal and that it has achieved, because of the presence of an e-commerce platform as good as eBay.

The board mainly focused and brought up reasons why PayPal helps eBay Inc. (NASDAQ:EBAY). These mentioned reasons are PayPal keeps growing faster because of eBay, data sharing between both these companies leads to more growth in profits, PayPal is given sufficient capital for its running, and finally, payments and commerce platforms were merging and that both companies needed each other.

Icahn’s take

Icahn had suggested that selling off a 20% stake in PayPal for an initial public offering would be better than spinning off the entire company. He mentioned that by this method they would only be selling a part of the company and PayPal would still retain the benefits both eBay and PayPal share at present. He believes that a stand-alone and publicly traded PayPal would generate more valuation than operating as a subsidiary of eBay. This would further enable PayPal to make its own acquisitions and increase growth.

Icahn owns roughly more than 2% of eBay Inc. (NASDAQ:EBAY) and has also nominated two members to sit on the company’s board of directors.

eBay Inc. (NASDAQ:EBAY)’s board has completely shunned Icahn’s new proposal and also responded directly to it. It also pointed out that Mr. Icahn had himself backed away and modified his proposal, form spinning off PayPal completely to a 20% spinoff, and that it is not the right path to tread for the company.

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