Investor Presentaiton
Pershing Square Is Not an 8.3% Owner of ADP
Pershing Square Misleadingly
Represents 8.3% Ownership of ADP
In referring to Pershing Square as "the company's largest
owner with an 8.3% stake" (1), Bill Ackman is misrepresenting
the degree of his investment in ADP
"In summary - we want you to elect a major shareholder to the
board, in this case it would be me representing Pershing
Square. We own 8.3% of the company... this has the effect of
sending a very powerful message to the management and the
board..."
Bill Ackman, "The Time is Now" Presentation, August 17,
2017*
More Than 75% of Pershing
Square's "Ownership" Is Options
Pershing Square owns 2.0% of common stock, not the 8.3%
that the fund has claimed since the start of their campaign
Pershing Square has wrongly characterized 28 million call options
(right to buy the stock in the future) as "ownership"
The call options do not provide the right to vote those 28 million
underlying shares of common stock in a proxy contest
Pershing Square elected not to convert a larger portion of its
derivative position prior to the September 8 record date, leaving it
with the right to vote only the 8.8 million shares that its 2%
ownership represents
* Permission to use quotations neither sought nor obtained
Sources: SEC filings
Notes:
1.
2.
Pershing Square Press Release, August 21, 2017.
Snapshot of Pershing Square's Current Ownership
Security
Shares
% O/S
Cost Basis (2)
Common
Stock
8,798,442
2.0%
$108
Call Options
28,005,233
6.3%
$116
Total
36,803,675
8.3%
$114
Description of Call Options
Over-the-counter and listed call options in ADP common stock
with expiration dates ranging from 2020-2021
Pershing Square's derivatives agreement prohibits it from
exercising or obtaining voting control
Would require an additional ~$2.0B investment by Pershing
Square to exercise call options to achieve 8.3% ownership
In light of Pershing Square not converting its 28 million call options
(equivalent to 6.3% of total shares outstanding) into common
stock, Pershing Square is not entitled to any dividend on that 6.3%
Cost basis for options is calculated as disclosed cost to purchase plus strike price, per Pershing Square 13D/A, dated 8/31/2017.
ADP
Copyright 2017 ADP, LLC.
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