EBay Breakup Inches Closer to Realm of Possibility -- WSJ

02/27/19 02:47 AM EST
By Cara Lombardo and Dana Cimilluca 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (February 27, 2019).

Online marketplace eBay Inc. and activist investors Elliott Management Corp. and Starboard Value LP are nearing a settlement deal that would give the activists board seats and could open the door to the company breaking itself up.

The three parties are discussing a deal in which Elliott and Starboard would receive multiple board seats, according to people familiar with the matter. The company would also agree to perform an operational review focused on improving profitability and a full-company strategic review -- which is expected to involve considering a range of potential sales or spin offs of units and a sale of the core company, the people said.

A deal isn't guaranteed -- the activists and the company are still working through some issues that could cause the talks to fall apart, according to people familiar with the matter. If a deal isn't reached, Elliott and Starboard have until March 1 to seek board seats through a proxy fight, though companies in active discussions with investors sometimes agree to extend the deadline to allow more time for negotiation.

Elliott disclosed a more than 4% stake in eBay in January and said in a letter to its board of directors that the company should spin off or sell its StubHub ticketing business and its classified-ads businesses. It also called on the company to revamp its core marketplace business, boost margins and ensure it has the right leadership in place. It also suggested that eBay's core marketplace, if separated from everything else, could be sold.

Starboard has also urged it to consider splitting apart its businesses, The Wall Street Journal previously reported.

In recent years, eBay shares have languished as the company has sought to distance itself from its reputation as an online auction house and battled the likes of Amazon.com Inc. in the e-commerce arena.

EBay last month said it would pay a 14-cent dividend in March, its first ever. Overall, the company said it would return about $7 billion to shareholders through dividends and buybacks over the next two years, with $5.5 billion of that happening this year.

Shares of the company rose 4 cents to close at $37.38.

Write to Cara Lombardo at cara.lombardo@wsj.com and Dana Cimilluca at dana.cimilluca@wsj.com

 

(END) Dow Jones Newswires

February 27, 2019 02:47 ET (07:47 GMT)

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