ADP Says Activist Investor William Ackman Seeks a Shake-Up

Chelsea West
August 5, 2017

If Ackman misses the nomination deadline, ADP's bylaws dictate that he would have to muster the support of 33 per cent of the company's shareholders to call for a special shareholder meeting, if he does not want to wait for next year's annual meeting. The request also noted that Mr. Rodriguez, who has served as CEO since November 2011, should be replaced.

"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 wrote in a note to clients.

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.

"We believe our current board has an effective balance of leadership continuity and fresh perspectives that will help us to continue this strong track record of delivering value to shareholders", ADP said.

Pershing Square declined to comment.

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

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.

The company also took aim at Pershing Square's financial performance, which has been battered by the Valeant investment.

ADP shares rose about 2% initially but have turned down 0.1% to 111.63 in the stock market today. From the beginning of the year through July 26, the day before Bloomberg News reported on Pershing Square's stake, the company's stock had risen about 3 percent, compared to about 9 percent for the Standard & Poor's 500 stock index.

On Friday morning, ADP's announcement of Ackman's desire barely registered with investors.

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