Ackman Tries to Change Narrative on ADP Fight
14 Agosto 2017 - 10:52AM
Dow Jones News
By David Benoit
William Ackman on Monday tried to change the narrative around
his $4 billion bet on Automatic Data Processing Inc., questioning
whether its chief executive accurately portrayed conversations with
the activist investor to the company's board and shareholders.
At the heart of Mr. Ackman's concern is a misfired email ADP
Chief Executive Carlos Rodriguez meant to send to his own legal
team but delivered to Mr. Ackman instead, according to a Monday
filing with the Securities and Exchange Commission. In the email,
Mr. Rodriguez said he had disregarded Mr. Ackman's statements about
being open to working with current management because he didn't
find them credible, Mr. Ackman said.
ADP couldn't immediately comment.
The human-resources software company has painted the activist
investor as attempting to fire Mr. Rodriguez and said he was trying
to take control by asking for five seats on a 10-person board. It
rejected his request for more time to negotiate privately, and Mr.
Rodriguez in a television interview called Mr. Ackman a "spoiled
brat" who wanted to take vacation instead of hitting a
deadline.
Mr. Ackman's Pershing Square Capital Management LP last week
nominated three directors, including Mr. Ackman.
On Monday, it refuted the events the company has described,
saying in the filing it had been willing to work with Mr.
Rodriguez. Mr. Ackman also questioned whether the CEO accurately
conveyed his requests to the board before the directors rejected
his request for time to negotiate, the filing said.
According to the activist, which owns an 8% stake in the
company, Mr. Ackman and Mr. Rodriguez first spoke Aug. 1 and the
activist asked for a chance to meet the board of directors before
he decided on a proxy fight. Told that the whole board was unlikely
to be available that month, Mr. Ackman asked for a 30- to 45-day
delay in the Aug. 10 deadline to nominate directors.
The next day, Mr. Ackman spoke to Chairman John Jones and for
the first time raised the possibility of seeking new management.
The activist told Mr. Jones the "substantial" changes he felt were
needed to improve profitability often required an outsider. The
filing said Mr. Ackman then called Mr. Rodriguez to tell him the
same, though he said he was open to current management.
In a meeting with Messrs. Rodriguez and Jones the next day, Aug.
3, Mr. Ackman asked for just a one-week extension to the deadline
and again tried to persuade them he was open to management,
according to the filing. Mr. Ackman followed up with an email that
said he would be "excited" to work with Mr. Rodriguez if "he shared
Pershing Square's view of the company's enormous opportunity,"
which he believed Mr. Rodriguez had indicated was true.
The following day, Aug. 4, ADP said it had rejected Mr. Ackman's
request for a 45-day delay to the window, saying he was attempting
to remove the CEO and replace half of the board.
Two days later, Aug. 6, Mr. Rodriguez, apparently meaning to
forward Mr. Ackman's email about being "excited" to work with Mr.
Rodriguez to ADP's general counsel, sent it to Mr. Ackman, the
filing said. In the email, Mr. Rodriguez said he didn't find the
email "credible" and that he had already told the activist he
didn't share his views, the filing said.
Since then, the sides have scheduled a meeting for
September.
This Thursday, Mr. Ackman is expected to detail his thesis for
the company for the first time on a conference call.
Write to David Benoit at david.benoit@wsj.com
(END) Dow Jones Newswires
August 14, 2017 09:37 ET (13:37 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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