EBay Bets PayPal In-House Beats Icahn’s Plan: Real M&A

EBay Inc. is willing to forgo a possible 26 percent stock pop by rejecting Carl Icahn’s proposal to split off PayPal, banking instead on the promise of longer-term rewards by keeping its online payment unit in-house.

Shareholders including Sterling Capital Management LLC and Kornitzer Capital Management Inc. are, so far, backing the stance of Chief Executive Officer John Donahoe, who says that a unified EBay helps fund PayPal’s expansion. Activist investor Icahn called a separation of PayPal, one of EBay’s fastest-growing businesses, a “no-brainer” that would improve value.