ADP Board Rejects Pershing's Request To Extend Director Nomination

Posted August 05, 2017

"The Board has unanimously determined that it is not in the best interests of ADP or its other shareholders to accede to Pershing Square's last-minute request for an extension".

Automatic Data Processing Inc., the outsourcer that handles paychecks for 26 million Americans, is resisting Ackman's Pershing Square Capital Management after saying the investor is seeking "effective" board control and lobbying to oust its chief executive officer.

Reps for Pershing Square declined to comment.

But ADP is pushing back, touting its total shareholder return of 202% since Rodriguez took the helm and contrasting it to Pershing's return of 29%.

"Rodriguez has very broad-based investor support and has factually delivered very compelling returns for shareholders so Pershing Square faces an uphill battle in this case", said Bernstein Research analyst Lisa Ellis. He took his bet on drugmaker Valeant all the way to the bottom, more or less, holding on to Pershing Square's stake until March of this year, despite a 2015 price-spiking scandal that drove off other hedge funds. Ackman make his pushes during ADP's 2017 annual meeting.

While Ackman may be able to score points with criticism of the company's strategy, he may find it hard to challenge Rodriguez given his track record as CEO, some analysts said. Pershing Square now has around $10-billion in assets under management.

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

In pre-market activity, shares were trading at $114.99, up 2.88 percent. ADP manages services including payroll, human resources and taxation for corporate clients. That compares to 6 percent sales growth for the fiscal year ended in June when the company reported $12.4 billion in sales. He amassed a passive investment in company from 2009 to 2011, Bloomberg data shows.