TheStreet

EBay  (EBAY) and activist investors Elliott Management Corp. and Starboard Value LP are close to a settling a dispute that would give the activists seats on eBay's board and possibly lead to the online marketplace breaking up into separate entities, The Wall Street Journal reported.

For the past few years, eBay shares have traded mostly sideways between $30 and $40 as the company has stubbornly tried to shed its image as an online auction house while trying to stave off the rise of online e-commerce behemoth Amazon.com (AMZN) .

Shares of eBay were up 0.51% in premarket trading at $37.57.

The three interested parties are discussing a deal that would give both Elliott and Starboard multiple board seats, the Journal said, citing sources. EBay would also agree to do an operational review to improve earnings and a full review of the entire company to see if a potential spinoff of units or even a sale of the core business would be in its best interest. 

In January, Elliott disclosed a more than 4% stake in eBay and sent a letter to the board coaxing it to spin off or sell the classifieds and StubHub businesses. Starboard also suggested that eBay should consider spinning off some of its businesses, the Journal previously reported.

A deal is far from guaranteed, as the parties discuss issues that could cause communication to fall apart, the Journal reported, citing sources.

In case there is no agreement, activists Elliott and Starboard have a March 1 deadline to enter a proxy fight by seeking seats on eBay's board. It's possible the deadline could be extended to allow more time for negotiations.