eCommerce

eBay Nearing A Settlement With Activist Investors Elliott Management, Starboard

eBay is close to reaching a settlement with Elliott Management and Starboard, the two activist investors that have been calling for change at the online auctioneer.

According to a report in The Wall Street Journal citing people familiar with the matter, the settlement being finalized would result in Elliott Management and Starboard getting board seats and could set the stage for a break-up of eBay.  People familiar with the matter said the two activist investors would get more than one board seat each, and eBay may agree to do an operational review of the company. The focus will be to improve profitability and to undergo a complete review of the business. eBay is expected to look at asset sales and a sale of the main business, noted the report.  Talks between the parties could still fall apart, cautioned The Wall Street Journal. If a deal isn’t reached, the two activist shareholders face a March 1 deadline to try to get board seats via a fight. The deadline could be extended as the company and Starboard and Elliott continue discussions, noted the report.

In January Elliott revealed it holds a stake of more than 4 percent in eBay. It called for asset sales, asking the company to spin out or sell StubHub and its classified ad unit. Elliott also wants the company to enhance its core business, improve margins and appoint the correct leadership to support changes.  A sale of the core marketplace was also suggested. Meanwhile, Starboard wants a break-up for eBay, noted The Wall Street Journal.

While eBay was a leader in the early days of the dotcom boom, more recently it has struggled as it attempted to move beyond being an online auction site and took on the likes of Amazon in eCommerce. In January it announced its first dividend ever, a 14 cent payout coming in March. It pledged to return roughly $7 billion to shareholders via dividends and buybacks in the next 24 months. eBay expects $5.5 billion of the $7 billion being returned to shareholders to take place in 2019, noted the WSJ.

 

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