| SAN FRANCISCO
SAN FRANCISCO E-commerce company eEbay Inc on Wednesday announced an agreement with activist investor Carl Icahn that will give investors a greater say in its PayPal payments unit once it is spun off and said it exploring a sale or public offering of its enterprise unit.
The moves 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. Wall Street analysts have identified Alibaba (BABA.N), Google (GOOGL.O) and Amazon (AMZN.O) as potential acquirers.
EBay also said it plans to cut its workforce by 7 percent, or 2,400 jobs, in the current quarter.
EBay shares were up 2.6 percent at $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 $210 million and $240 million in the first quarter and $350 million to $400 million for the entire year.
For the 2015 first quarter, eBay forecast earnings between 68 cents and 71 cents a share, below analysts' estimates of 76 cents per share. Its revenue forecast of $4.35 billion to $4.45 billion fell short of the average Wall Street forecast of just over $4.7 billion.
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.
EBay is also exploring a sale or an initial public offering of its enterprise division, which helps retailers around the world beef up their online presence. The company said the unit did not fit neatly with PayPal or the marketplace division.
EBay earned 90 cents per share in the fourth quarter. It was expected to earn 89 cents per share, according to the average analyst estimated compiled by Thomson Reuters I/B/E/S. In the year-ago quarter, it earned 81 cents per share.
(Reporting by Deepa Seetharaman; Additional reporting by Edwin Chan; Editing by Leslie Adler)