Icahn: eBay Should Sell 20% of Paypal

By Greg Bensinger 

Activist investor Carl Icahn is trying a new tack in his battle with eBay Inc. over the future of its payments unit PayPa: a partial spinoff.

In a notice on his website Wednesday, Mr. Icahn called on eBay to sell 20% of PayPal to the public, while keeping the remaining stake. "Before the transaction is consummated the companies could enter into a long-term, commercially viable contract, preserving all synergies," said Mr. Icahn, who holds a roughly 2% stake in eBay.

"A 20% IPO of PayPal could allow for all of the benefits of an independent PayPal, preserves all of the benefits of keeping PayPal in-house and could be structured so as to be tax free to shareholders," he said.

An eBay spokeswoman didn't immediately respond to a request for comment. eBay has said the company is better off with PayPal as a full subsidiary.

Write to Greg Bensinger at [e-mail]

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