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eBay Chooses Peace with Elliott—for Now

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Mar. 6 2019, Updated 11:46 a.m. ET

Exploring options for StubHub and Classifieds businesses

This month, eBay (EBAY) announced some form of settlement with activist investors Elliott Management and Starboard Value. The first phase of the settlement is set to have eBay nominating representatives of these activist hedge funds to its board of directors, and the second phase involves eBay undertaking a strategic review of its StubHub and Classifieds businesses.

The review will explore selling or spinning off these businesses. In January, Elliott wrote to eBay and made wide-ranging proposals, including suggestions that the company spin off or sell its ticket sale business, StubHub, and online classified ad service, Classifieds.

In 2015, eBay spun off its payment unit, PayPal (PYPL), into an independent public company at the urging of activist investor Carl Icahn. eBay hopes to conclude the strategic review of its StubHub and Classifieds businesses before the end of this year.

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Activists on the prowl

Jesse Cohn, Elliott’s head of US equity activism, will represent it on eBay’s board. He also sits on the board at Citrix Systems (CTXS), where Elliott had proposed changes before it secured a seat on the software company’s board. Not long after Cohn joined Citrix’s board, the company decided to sell its online meeting and video conferencing platform, GoTo, to LogMeIn (LOGM) for $1.8 billion.

In recent months, Starboard has also targeted Dollar Tree (DLTR) and Magellan Health (MGLN) with proposals that include the sale of certain assets or the entire company. In the fourth quarter, eBay generated $2.9 billion in revenue.

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