Bayliss
BOSTON (Reuters) – Billionaire hedge fund manager William Ackman, whose firm has a 2 percent voting stake in Automatic Data Processing Inc (ADP.O), is turning up the heat in his proxy war for the human resources outsourcing company by targeting an often-ignored but influential group of people – retail investors.
The activist investor who spends much of his time meeting institutional shareholders in Wall Street boardrooms is now speaking directly to the Main Street investor through video, telephone and television as his proxy fight with ADP intensifies before the company&rsquo-s annual meeting on Nov. 7.
Ackman, 51, began voicing his criticisms of ADP&rsquo-s performance in late August.
Now, his campaign to get himself and two other nominees associated with his Pershing Square Capital Management hedge fund elected to the ADP board is taking a tack seldom seen in proxy contests: speaking to the company&rsquo-s retail investors to win their votes.
Individual shareholders hold 28 percent of ADP shares while Ackman&rsquo-s Pershing Square Capital Management has a 2 percent voting stake. Ackman&rsquo-s firm will be able to vote only the shares of common stock.
Ackman, known for his presentations of 100-plus pages and hours-long conference calls with analysts, will soon let retail investors who own as little as one share in ADP ask him anything they want. He is planning a conference call on a weekday evening at 8 p.m. that will last as long as it takes, he said. A date has not been set.
The usual method of dissident investors like Ackman is only to send letters to retail investors, which often end up in the trash.
Earlier on Wednesday, Ackman released a video telling retail investors they hold the key to ADP’s future and should send management a message at the November meeting that the status quo is no longer acceptable. (PG.N).
Similarly, Ackman – who has both won and lost big proxy contests – needs the retail-investor vote at this time.
As the proxy contest has gained steam, a war of words is taking hold and Ackman is trying to change the narrative. ADP&rsquo-s CEO, Carlos Rodriguez, in mid-August referred to Ackman as a &ldquo-spoiled brat&rdquo- in a CNBC interview. Ackman later said this upset his mother, who did not raise him as that.
While Ackman&rsquo-s fund is losing money this year, he has earned an average 10.6 percent a year over the life of the fund.
Ackman said on Wednesday that to set the record straight, he does not want to control ADP. Rather, he thinks the company – whose shares have gained 22 percent in the last year – can perform better.
(This version of the story corrects size and nature of firm&rsquo-s stake in ADP throughout)
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