E-commerce company eBay Inc. has agreed to give investors a greater say in its PayPal payments unit once it is spun off and said it is exploring a sale or public offering of its enterprise business.
The moves, engineered by activist investor Carl Icahn, could lay the groundwork for a future acquisition of eBay and PayPal by companies looking to gain a foothold in the e-commerce and online payments markets, Reuters reported Thursday.
Alibaba, Google and Amazon could be potential acquirers, Wall Street analysts said.
EBay also said it plans to cut its workforce by 7 percent, or 2,400 jobs,this quarter. Shares were up 2.6 percent at US$54.75 in after hours trade.
The company reported fourth-quarter earnings that slightly topped Wall Street expectations but its outlook for the 2015 first quarter and full year fell short of estimates.
Under the standstill agreement with Icahn, eBay’s largest active shareholder, Icahn Capital executive Jonathan Christodoro was named to eBay’s board. He will have the ability to transition to PayPal’s board once the spin-off occurs.
EBay also is adding two Wall Street bankers to its board, expanding the number of directors to 15.
PayPal agreed to adopt a number of measures proposed by Icahn, which the billionaire said enhance corporate governance at the fast-growing payments arm.
The provisions are intended to give shareholders a larger voice in important decisions, particularly an acquisition bid.
They include a provision that any “poison pill” designed to ward off acquisition attempts be ratified by stockholders or expire after 135 days, and that holders of 20 percent of its shares be allowed to call a special meeting of stakeholders.
“As we have said many times in the past, we believe that if an offer is made for a company, it should be the decision of the shareholders – not the board – to decide whether that offer is worth accepting,” Icahn said in a statement posted on his website.
The planned job cuts will be across the marketplace, payments and enterprise divisions, eBay said.
Restructuring and separation costs are expected to be between US$210 million and US$240 million in the first quarter and $350 million to US$400 million for the entire year.
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