Ackman on comeback trail takes aim at ADP, gets instant pushback

Javier Stokes
August 5, 2017

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

(NYSE:ADP) rose 2.9% in premarket trade Friday, after the business consulting company revealed that activist investor William Ackman's Pershing Square Capital Management is seeking to take control.

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

Reps for Pershing Square declined to comment. "He also said CEO Carlos Rodriguez should be replaced".

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.

On August 1, Pershing Square approached the company and requested an in-person meeting with the Board to share our research and its conclusions.

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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 company has a market value of $50 billion.

He has forced changes, cheered by investors, at companies like Canadian Pacific Railway, as well as Air Products and Chemicals Inc.

"Since Carlos Rodriguez became CEO almost six years ago, ADP's total shareholder return of 202 percent is well in excess of the S&P 500 TSR of 128 percent - and is many multiples of Pershing's TSR of 29 percent", the company said. Pershing Square's return over the same period is 29 percent, the statement claimed.

Hedge fund billionaire Bill Ackman is trying to shake up the management of his latest target, ADP, a New Jersey-based provider of payroll and benefits services.

ADP stock was down slightly as of Friday morning, but is up 8% year-to-date. Ackman previously owned shares in ADP from 2009 to 2011, according to data compiled by Bloomberg.

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