Bill Ackman the embattled activist investor has started his comeback, but it does not appear he picked a target that will be easy.
Automatic Data Processing, the outsourcer that handles payroll checks for more than 26 million workers in the U.S., is resisting pressure from Pershing Square Capital Management, Ackman’s company after saying Ackman was seeking to gain effective board control while lobbying to oust the current CEO.
Ackman, who is 51, needs some positive news. He left his high profile investment with Valeant Pharmaceuticals in March with a cost to the firm of more than $4 billion. At the same time, a Chipotle Mexican Grill stake is worth close to $190million less than at the time it was acquired a year ago thanks to renewed concerns about food safety.
However, an analyst on Wall Street said it appears that ADP was firmly pushing back against Ackman, not likely to accede to corporate governance of any kind or demands that are financial or operational.
Pershing Square is seeking five seats on the 10-member ADP board this year at its annual shareholders meeting and trying to have Carlos Rodriguez the CEO at ADP replaced.
The activist investor also has asked ADP to extend a deadline it set for nominations for directors, which the ADP board rejected.
In a prepared statement, ADP said it believes the current board contains an effective balance of fresh perspectives and leadership continuity that helps the company continue its strong track record of delivering its shareholders good value.
A Pershing Square representative would not comment on the situation when asked on Friday. The firm has yet to disclose its ADP holdings.
The statement on Friday came after a report released last week that said Ackman had built up a stake in the check processing firm.
Based in New York, Pershing Square will typically buy large stakes in different big companies then agitates executives and board members to make different changes to increase shareholder return.
Results are mixed. After he spent close to two years attempting to convince anyone that his Valeant investment was good, Ackman recently called the effort at the drug maker a big mistake.
Chipotle shares, in which Pershing Square used $1.17 billion to acquire last year, are over 17% down since Pershing Square disclosed its stake.
However, successes exist as well. In 2016, Pershing Square left its long term investment with Canadian Pacific Railway that earned $2.6 billion.