Bill Ackman Pushing for Board Seats to Control ADP

Posted August 05, 2017

Ackman requested that ADP extend its August 10 deadline for nominating directors by 30 to 45 days, which the company declined to do, according to its statement on Friday.

"ADP appears to be strongly pushing back against Pershing Square's Bill Ackman, unlikely to accede to any corporate governance or financial/operational demands", Wells Fargo & Co. analyst Richard Eskelsen, who has a market perform rating on the shares, wrote in a note to clients.

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.

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ADP said that during Rodriguez' six-year tenure, ADP has yielded a total shareholder return (TSR) of 202 per cent, well in excess of the S&P 500 TSR of 128 per cent and many times over Pershing's TSR of 29 per cent.

SV&C's George Sard, Liz Zale and Jared Levy represent ADP.

Pershing Square declined to comment.

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Based on extensive research and due diligence, Pershing Square believes that there is an enormous opportunity to improve the operating performance of ADP by accelerating growth, improving the quality of ADP's software and service offerings, dramatically reducing operating costs, and increasing efficiency. The size of the stake, about 8%, is mostly through derivatives, according to ADP. Ackman didn't provide names of his other potential nominees, other than his own, the sources said. The investor is also planning to push for margin improvements, but didn't mention plans for a major financial overhaul, they said. Pershing Square now has around $10-billion in assets under management.

In premarket trade, ADP shares rose 2.76% to US$114.85. The stock is up about 8.2 percent this year, valuing the company at $49.8 billion. He amassed a passive investment in company from 2009 to 2011, Bloomberg data shows.

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