EBay Considering PayPal Spinoff, Report Claims

Thursday, 21 Aug 2014 01:44 PM

 

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EBay Inc. is considering a spinoff of PayPal, its fast-growing payments unit, as soon as next year, tech news website The Information reported, citing sources.

Shares of the online retailer jumped nearly 4 percent to $55.48 at midday.

EBay told potential candidates for the position of PayPal chief executive officer, a post that David Marcus vacated in June, about a possible spinoff of the payments unit, the website reported. Marcus is now a Facebook Inc. executive.

A PayPal spinoff would mark an about-face for the company. EBay CEO John Donahoe has resisted demands by activist investor Carl Icahn to hive off the payments service, saying PayPal was integral to eBay's business — and vice versa — and a split would not make sense.

"The board will continue to assess all alternatives to create that long-term value and to enhance the growth and competitive positions of both eBay and PayPal. This position has not changed," eBay spokeswoman Amanda Miller said.

Whether eBay has decided to spin off all or part of PayPal, and what structure that could take, remained unclear, The Information reported.

Icahn eventually backed off from his demand in April, saying that while he supported a PayPal split in the near future, now was not the time. Some investors, however, feel an independent PayPal can grow by attracting online retailers wary of rival eBay.

© 2014 Thomson/Reuters. All rights reserved.

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