Ackman Tries to Change Narrative on ADP Fight

By David Benoit Features Dow Jones Newswires

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.

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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.

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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)