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Omega's Cooperman: eBay should spin off portion of PayPal

NEW YORK (Reuters) - Leon Cooperman, chief executive of hedge fund Omega Advisors, said Monday that he agreed with activist investor Carl Icahn's push for eBay Inc to spin off its PayPal online payments business.

"I give Carl a lot of credit for taking the time and showing the energy, and in this case, we happen to agree with him," Cooperman, an eBay shareholder, said on CNBC television. "I think they should spin out a portion of PayPal," he said, noting that he owns about 2 percent of eBay shares.

Icahn, who owns just over 2 percent of the e-commerce company, has been pressuring eBay for weeks to spin off PayPal. The billionaire investor has repeatedly accused eBay of poor corporate governance.

Cooperman also said that the U.S. stock market was fairly valued at its current levels and would be surprised if it shot higher.

The Standard & Poor's 500 stock index rose 29.6 percent last year, notching its best annual performance since 1997. The benchmark index has risen about 1.6 percent so far this year.

In a separate interview, Icahn told CNBC that eBay Chief Executive John Donahoe has delivered "mediocre" results for the company versus peers such as Amazon, Visa and MasterCard Inc.

EBay rejected Icahn's two nominees to its board on Monday, saying both were unqualified, and urged shareholders to vote against them at its next annual meeting.

Icahn said Monday that nutrition and weight loss company Herbalife was not a pyramid scheme, a claim that hedge fund manager William Ackman has made. Icahn and Ackman have publicly feuded over the company's value.

Icahn owned about 16.8 percent of Herbalife's shares at the end of last year, according to regulatory filings, while Ackman's $12 billion Pershing Square Capital Management has bet $1.16 billion that the company is a fraud.

"It has gone to a point that I think is almost bordering on the insane," Icahn said in response to a New York Times article on Monday about Ackman's $1 billion bet that Herbalife will fail, entitled "After Big Bet, Hedge Fund Pulls the Levers of Power."

Icahn, chairman of Icahn Enterprises L.P., said he had "never sold a share" of Herbalife.

(Reporting by Sam Forgione; Editing by Jonathan Oatis)

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