Thursday, 19 October, 2017

Bill Ackman builds 8% stake in ADP

Pershing Square's Bill Ackman Pershing Square's Bill Ackman
Heather Davidson | 05 August, 2017, 00:34

Ackman also told ADP that CEO Carlos Rodriguez "should be replaced". However, ADP added that it doesn't want to push back the deadline.

While Ackman may be able to score points with criticism of the company's strategy, he may find it hard to challenge Rodriguez given his track record as CEO, some analysts said.

The Roseland, N.J., human-resources software company said its board unanimously rejected the "last-minute" request, as the deadline for board nominees has been public for almost a year.

The embattled activist investor is seeking to install five dissident director candidates onto ADP's 10-person board and he's seeking a seat for himself.

The current board has "an effective balance of leadership continuity and fresh perspectives" that will help ADP to further its goals, said the statement.

Prior to building Pershing's position in ADP, Ackman approached a number of his hedge fund investors to raise money earmarked only for the ADP bet through a special goal vehicle, sources familiar with the fundraising said.

Reps for Pershing Square declined to comment.

ADP also couldn't resist taking a swipe at Pershing Square's recent weak performance.

Shares in Chipotle, on which Pershing Square spent about $1.17 billion previous year, are down more than 17 percent since the stake was disclosed.

Ackman met with Rodriguez on Thursday and asked to postpone the nomination deadline but was told no, two sources told CNBC. The company's market value was about $50 billion as of Thursday's close.

Pershing Square is said to have acquired an 8 percent stake in ADP through derivatives, which are not subject to the same disclosure requirements as stock. Pershing Square's return over the same period is 29 percent, the statement claimed.

ADP stock was down slightly as of Friday morning, but is up 8% year-to-date.

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