Pershing Square asks fellow Ceridian shareholders to support alternatives to $36-per-share offer

By Lisa Kerner

Charlotte, N.C., June 13 - Ceridian Corp. shareholder Pershing Square Capital Management LP retained Lazard Frères & Co. LLC and Sullivan & Cromwell LLP to pursue "one or more value-maximizing alternatives" for the company in response to Ceridian's proposed sale for $36 per share.

In an open letter to Ceridian stockholders, Pershing said it opposed the sale of the company at a low price. The letter was included in a schedule 14A filing with the Securities and Exchange Commission.

Pershing is considering one or more of the following alternatives for Ceridian: a sale of the entire company at a higher price, a sale or separation of one or both of the company's main operating units, and a recapitalization, dividend or self-tender transaction.

"We expect, therefore, to approach the company to seek information relevant to our formulation of a more definitive proposal," the letter stated. In addition, the investor said Ceridian would need to waive any standstill agreements and "cooperate to enable this process to achieve the highest value reasonably obtainable for all Ceridian stockholders."

In response to Pershing, Ceridian issued a statement saying the board determined that the proposed sale "was in the best interests of Ceridian shareholders and provided the greatest and most certain value of the available alternatives." In addition, the board said it "welcomes involvement by shareholders and is prepared to review any proposals that might result in a superior proposal per the merger agreement."

The company will present the merger transaction for shareholder approval at Ceridian's annual meeting to be held no later than Sept. 21.

On May 30, Ceridian agreed to be jointly acquired by Thomas H. Lee Partners, LP and Fidelity National Financial, Inc. in an all-cash transaction valued at approximately $5.3 billion.

The $36-per-share offer price is a 17% premium over Ceridian's closing share price on Feb. 12, the last trading day prior to the company's announcement that it would seek strategic alternatives. The per-share price is a 56% premium over Ceridian's closing share price on Oct. 6, 2006, the last trading day prior to Kathryn V. Marinello's appointment as president and chief executive officer of the Minneapolis information services company, a previous news release stated.

Thomas H. Lee is a Boston-based private equity investment firm, and Fidelity National Financial is a title and specialty insurance company based in Jacksonville, Fla.

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