Carl Icahn has changed his opinion in his scorched earth campaign against eBay, the e-commerce giant.
The activist investor who is worth billions now wants eBay to have an initial public offering that equals 20% of the PayPal payments division. Prior to this chance of stance, Icahn wanted the company to spinoff the entire unit.
The slight retreat by Icahn comes a month into the campaign he is holding against the management and the company itself, whether the change will give eBay the upper hand in fending off the investor, as its annual meeting for shareholders approaches, is still to play out.
In a preliminary proxy statement on March 11, Icahn proposed that two nominees Jonathan Christodoro and Daniel Ninivaggi to the board of directors at eBay.
In another Icahn proposal, he sought eBay to enter into an agreement with an investment bank in order to spinoff the PayPal unit.
In a letter on Wednesday to management at eBay, Icahn changed his stance, saying that eBay could conduct a 20% IPO for PayPal easily, allowing the business to retain control of 80% of the asset that has been fast growing.
Icahn conceded there are so-called synergies between PayPal and eBay, which would be preserved in an offering that was a minority stake.
Icahn in this letter also seemed to indicate that the market position for PayPal might be better than his previous letters in which he compared the unit at eBay to fallen stars such as Eastman Kodak.
He wrote that luckily for eBay’s unit PayPal, competition such as Apple, Google and others do not have a comparable scale or product offerings.
The positive, to a point, comments contrasted with a letter released earlier this week by the activist which said that if it was left as eBay division, PayPal might well be headed in the direction of other tech greats like Kodak, Blackberry, Polaroid, Dell, Xerox, Nintendo, Sony AOL and Palm.
On Wednesday, Icahn said a partial PayPal IPO would highlight its value, provide the division with a focused and independent management team, money for top hires and acquisitions, while maintaining the synergies of the current structure of eBay.
