Activist Investor Bill Ackman Sets His Sights On Automatic Data Processing (ADP)

Hedge fund billionaire Bill Ackman is trying to shake up the management of his latest target

Hedge fund billionaire Bill Ackman is trying to shake up the management of his latest target

ADP said the New York-based hedge fund had asked earlier this week to extend the August 10 deadline to nominate directors to its. ADP shares returned about 164%, including dividends, between the time he took over and when Mr. Ackman's stake surfaced, besting the 120% return of the S&P 500 over the same period.

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. ADP's board includes 10 people. "Since Carlos 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%", the release said.

SV&C's George Sard, Liz Zale and Jared Levy represent ADP.

Reps for Pershing Square declined to comment.

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Pershing Square has long admired ADP's business.

In a meeting with ADP executives this week, Ackman said the company is poorly managed but provided little detail as to his plans, according to the sources. 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 didn't provide names of his other potential nominees, other than his own, the sources said. 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. Pershing Square now has around $10-billion in assets under management.

In trading Friday, shares of ADP were up 88 cents, or 0.8 percent, to $112.65.

ADP stock was down slightly as of Friday morning, but is up 8% year-to-date. That compares to 6 percent sales growth for the fiscal year ended in June when the company reported $12.4 billion in sales.

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