(Adds eBay’s response, background, analyst comment)
Feb 4 (Reuters) - Activist shareholder Starboard Value LP piled more pressure on eBay Inc on Tuesday to sell off its classifieds business, saying it had not made enough progress to improve shareholder value.
EBay last year agreed to sell its ticketing unit, StubHub, for $4.05 billion in cash, under pressure from Starboard and Elliott Management Corp. They had also urged it to sell eBay Classifieds Group as part of a plan that could double the company’s value.
“To achieve the optimal outcome, we believe Classifieds must be separated, and a more comprehensive and aggressive operating plan must be put in place to drive profitable growth in the core Marketplace business,” Starboard said in a letter to eBay’s board.
EBay has been shifting focus to its advertising and payments businesses, as it faces stiff competition in its marketplace business from Amazon.com Inc and Walmart Inc.
“We will review Starboard’s letter and perspectives as we continue to rigorously review our business and opportunities for growth and value creation,” eBay said in response to Starboard’s letter.
In Sept. last year, Chief Executive Officer Devin Wenig stepped down, citing differences with the board revamp carried out in March by the company following pressure from the activist investors.
Ebay is expected to provide an update mid-2020 on its Classifieds business, which Elliott has valued at between $8 billion and $12 billion.
Starboard seems to be nudging eBay for a faster conclusion of its strategic review, said Robert W. Baird & Co analyst Colin Sebastian.
“Although the nuts and bolts of what Starboard is asking seem pretty consistent with what the company is already doing,” he added.
Elliott Management did not respond to a request for comment on Starboard’s letter to the board. (Reporting by Supantha Mukherjee and Ambhini Aishwarya in Bengaluru; Editing by Anil D’Silva and Arun Koyyur)
Our Standards: The Thomson Reuters Trust Principles.