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eBay tells shareholders to ignore Icahn's appeals

The company wants investors to simply discard any proxy card sent to them from Carl Icahn in advance of the annual meeting in May.


eBay is asking stockholders to stand by the company in its battle with activist investor Carl Icahn.

In a letter sent on Tuesday, eBay told its shareholders to "discard any proxy card sent to you by Mr. Icahn" and instead use the "white" proxy card to elect board members chosen by the company. eBay touted its own board nominations -- Fred Anderson, Edward Barnholt, Scott Cook, and John Donahoe -- as "business leaders in technology with track records of delivering substantial shareholder value."

Icahn and eBay have been duking it out in a war of words the past couple of months over the direction of the company. Icahn had been urging eBay to spin off PayPal as a separate entity as a way to increase shareholder value, a move that eBay has continually nixed. The activist investor has also been demanding that eBay add some of his own choices to the board of directors.

Icahn recently softened his stance slightly on a PayPal spinoff by suggesting that eBay sell off 20 percent of the online payment company through an IPO. But the questions about PayPal and the makeup of the board utlimately rest in the hands of the stockholders, prompting eBay's letter.

"The bottom line is that Mr. Icahn is wrong about the quality of our board and he's wrong about the best course today for PayPal," eBay said. "We oppose his unqualified board nominees, and we recommend that shareholders vote against his non-binding proposal to separate PayPal from eBay."