Bill Ackman Pushing for Board Seats to Control ADP

Bill Ackman Pushing for Board Seats to Control ADP

It doesn't look like he's picked an easy target.

Pershing Square Capital Management, L.P. ("Pershing Square") and certain of its affiliated funds intend to file with the Securities and Exchange Commission (the "SEC") a proxy statement and accompanying proxy card to be used to solicit proxies in connection with the upcoming annual meeting of stockholders (the "Annual Meeting") of Automatic Data Processing, Inc.

Ackman is best known for his crusade against Herbalife. He exited a high-profile investment in Valeant Pharmaceuticals International in March that cost the firm $4 billion, while a stake in Chipotle Mexican Grill, which has been hit by renewed food-safety concerns, is worth nearly $190 million less than when he acquired it previous 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. ADP's board includes 10 people. Pershing Square intends to file a Schedule 13D on Monday, August 7, 2017.

This isn't the first time Ackman has owned a stake in ADP.

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

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Results have been mixed.

While ADP says it is "open" to discussions with shareholders, it is unimpressed with Ackman's demands.

Pershing Square has long admired ADP's business.

Pershing Square Capital Management, L.P. ("Pershing Square") announced today that it has acquired an 8% stake in ADP (Nasdaq: ADP), making it Pershing Square's largest investment. The company has a market value of $50 billion. The request also noted that Mr. Rodriguez, who has served as CEO since November 2011, should be replaced.

ADP said in the six years that Carlos Rodriquez has been CEO, ADP's total shareholder return (TSR) has been 202%, while the S&P 500's SPX, -0.22% TSR has been 128% and Pershing's TSR has been 29%. Pershing Square now has around $10-billion in assets under management.

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