Ackman Criticizes ADP's 'Bed Bug' Letter

By Cara Lombardo Features Dow Jones Newswires

William Ackman, the activist investor fighting for three board seats at Automatic Data Processing Inc., criticized the company for saying it was going to report him to the Securities and Exchange Commission for spreading what it called "false and misleading" claims.

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"Putting out a press release saying that you are reporting me to the SEC is a move designed to smear my reputation for a tactical advantage in a proxy contest," Mr. Ackman wrote in a letter to ADP's board of directors Wednesday. "It is not an appropriate thing to do, nor is it fair play."

Mr. Ackman, founder of Pershing Square Capital Management LP, took a $4 billion stake in ADP in August and is pushing for board seats for himself and two of his nominees in a Nov. 7 election. He has argued the company has focused too much on meeting revenue guidance and not enough on developing new technology.

In a report last week, proxy adviser Institutional Shareholder Services recommended shareholders support two of ADP's three board candidates for those seats, which would leave an opening for Mr. Ackman but not each of his nominees. That prompted Mr. Ackman to write an 18-page letter to ISS, accusing ADP of providing ISS "nonpublic, inaccurate and misleading information, claims and arguments."

ADP said Tuesday it rejects statements made by Mr. Ackman and that it planned to file a complaint with the SEC.

ISS also said in a statement Tuesday its longstanding policy isn't to elicit, receive or use nonpublic information in its research. That process was followed with respect to the pending ADP proxy contest, ISS said, and the company stands by its report.

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Mr. Ackman said in his response Wednesday that writing letters to the SEC complaining that the other side has put out bad information is commonplace in proxy contests.

"They are called 'bed bug letters,' and are entirely ordinary course in every proxy contest," he said.

Write to Cara Lombardo at cara.lombardo@wsj.com

(END) Dow Jones Newswires

November 01, 2017 07:35 ET (11:35 GMT)