Pershing Square Capital Management has announced that it has acquired an 8% stake in ADP making it Pershing Square’s largest investment. It intends to file a Schedule 13D on Monday, August 7, 2017.
According to a statement by the company, it has long admired ADP’s business. Based on extensive research and due diligence, Pershing Square believes that there is an enormous opportunity to improve the operating performance of ADP by accelerating growth, improving the quality of ADP’s software and service offerings, dramatically reducing operating costs, and increasing efficiency.
On August 1st, Pershing Square approached the company and requested an in-person meeting with the Board to share our research and its conclusions. To facilitate constructive private discussions, we requested an extension of the company’s August 10th nominating deadline.
At ADP’s request, we met with the company’s CEO and Chairman. At that meeting, we reiterated our request for an extension to the nominating deadline and discussed the potential additions of several independent directors and a Pershing Square representative to the Board. 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.
We were disappointed to learn from an ADP press release that the company has denied our request for an extension that could have facilitated constructive discussions. Accordingly, Pershing Square will nominate a minority slate to the Board.
Pershing Square Capital Management, L.P. based in New York City, is a SECregistered investment advisor to investment funds.