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Activist investor Carl Icahn has called on e-commerce giant eBay to spin off its payments business, PayPal.

Mr Icahn made the proposal as he disclosed he had acquired a 0.8% stake in the firm. He has also nominated two of his employees to join eBay's board.

The firm said it routinely reviews its strategy and has explored "in depth" a spin-off or separation of PayPal .

But it added that it does not believe that breaking up the firm is the best way to "maximize shareholder value".

"PayPal is able to leverage the company's technology capabilities, commerce platforms and relationships with retailers, brands and large merchants worldwide," eBay .

"Payment is part of commerce, and as part of eBay, PayPal drives commerce innovation in payments at a global scale, creating value for consumers, merchants and shareholders."

The firm's shares rose as much as 12% in after hours trading after Mr Icahn's proposal.

The Silicon Valley firm had acquired PayPal in 2002 for $1.5bn (£905m).

The division has been a key driver of eBay growth as an increasing number of consumer turn to online shopping - prompting increased use of online payment services.

, revenues at its PayPal division rose to $1.84bn in the October-to-December quarter, a 19% jump from a year earlier.

That accounted for nearly 40% of the firm's total revenue.

Mr Icahn was quoted as saying by the Financial Times and Bloomberg news agency that spinning-off the division was a "no brainer" and that such a move would boost its value.

However, some analysts said that it was unlikely eBay would consider the proposal.

"I expect it to be a battle," said Colin Gillis, an analyst with BGC Partners.

"One of the reasons for that is because for commerce and payments, you need to remove as much friction from those two systems as possible. If you separate it out, you put more friction between them."