Automatic Data Processing Inc. said activist investor and hedge-fund manager Bill Ackman is seeking to take half of its board seats and replace Chief Executive Carlos Rodriguez, in the latest of recent examples of activist investors looking to force changes at companies.
Shares of ADP are up 2.5% at $114.50 in premarket trading Friday.
ADP said New York-based Pershing Square Capital Management LP asked earlier this week to extend the Aug. 10 deadline to nominate directors to its board by 30 to 45 days. Mr. Ackman told the company he wants to nominate himself and four other directors to the 10-person board. The request also noted that Mr. Rodriguez, who has served as CEO since November 2011, should be replaced.
Activists and companies often extend a nomination deadline in order to negotiate changes privately without needing to launch a public shareholder fight.
The Roseland, N.J., human-resources software company said its board unanimously rejected the "last-minute" request, as the deadline for board nominees has been public for nearly a year. Mr. Ackman told the company that he has an 8% stake in ADP, largely through derivatives.
ADP also argued that because its shareholder return under Mr. Rodriguez's tenure as CEO has been stronger than Mr. Ackman's performance at Pershing and no executive changes are needed.
"We believe our current board has an effective balance of leadership continuity and fresh perspectives" that will help continue delivering value to shareholders, the company said in a statement.
(END) Dow Jones Newswires
August 04, 2017 09:44 ET (13:44 GMT)