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Bill Ackman builds 8% stake in ADP

05 August, 2017, 00:32 | Author: Samuel Sharp
  • Hedge fund billionaire Bill Ackman is trying to shake up the management of his latest target

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.

ADP said Friday that Ackman's Pershing Square Capital Management informed the company that it wants Ackman nominated to the 10-member board, along with four others, and it wants to push back the August 10 deadline for nominating directors.

Ackman met with Rodriguez on Thursday and asked to postpone the nomination deadline but was told no, two sources told CNBC.

Pershing Square declined to comment. We also discussed the need for transformational change at the company and expressed a willingness to work with existing management or, alternatively, an external CEO candidate, to effectuate that change.

Ackman had previously invested in ADP from 2009 to 2011. Pershing Square's investor return from 2012 through a year ago, according to ADP, was about 29 percent.

The company added that since Rodriguez became CEO almost six years ago, ADP's total shareholder return of 202% is well in excess of the S&P 500 TSR of 128% - and is many multiples of Pershing's TSR of 29%.


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.

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.

There have been successes too: Last year, Pershing Square exited a long-time investment in Canadian Pacific Railway Ltd. that made about $2.6 billion, and in July it sold part of its stake in fast-food chain holding company Restaurant Brands International Inc. after shares in the owner of Burger King and Tim Hortons rose 39 percent over the previous year.

Bill Ackman's re-kindled lust for paycheck processor ADP is now out in the open.

About Pershing Square Capital Management, L.P.

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