Ebay does deal with Icahn

Faustian_BargainOnline auction outfit Ebay has done a deal with its activist investor Carl Icahn that will give investors a greater say in its PayPal payments unit once it is spun off.

Ebay said it exploring a sale or public offering of its enterprise unit.

The deal clears the way for a future buy  of eBay and PayPal by companies looking to gain a foothold in the e-commerce and online payments markets. Alibaba, Google and Amazon could all be interested.

Meanwhile Ebay is going to cut its workforce by seven percent, or 2,400 jobs, in the current quarter. While the company is making a pile of money, its outlook for the 2015 first quarter and full year fell short of what the cocaine nose jobs of Wall Street expected, so its workers will have to pay the price.

The planned job cuts will be across the board in all parts of the company except the board. Payments and enterprise divisions will be hit, eBay said. Restructuring and separation costs are expected to be between $210 million and $240 million in the first quarter and $350 million to $400 million for the entire year.

Also under the deal with Ichan, 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.

Two Wall Street bankers has been added to its board, because you always need a board full of bankers.

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.

EBay plans to split its marketplace division from PayPal in the second half of this year. PayPal will be a standalone publicly traded company, which some analysts say will be worth $40 billion.