Pershing Square supports Ceridian buyout, continues proxy battle for board nominees

By Lisa Kerner

Charlotte, N.C. Aug. 14 - Ceridian Corp. investor Pershing Square Capital Management, LP said it intends to fully support the proposed buyout offer of the company by affiliates of Thomas H. Lee Partners, LP and Fidelity National Financial, Inc.

Stockholders are set to vote on the deal at Ceridian's annual meeting on Sept. 12. The transaction values Ceridian's equity at $36 per share, or some $5.3 billion.

Pershing's William A. Ackman acknowledged that "significant developments in the credit markets" led in part to the investor's support of the buyout.

"In light of current market conditions and after the completion of our review process, we are confident that the buyout offer at $36 per share is the highest all-cash price reasonably attainable for the company," Ackman said in a company news release.

Despite its support for the buyout, Pershing said it will continue to pursue its proxy contest, citing ongoing market concerns as well as the buyout group's walk-away right for payment of a $165 million break-up fee.

"We don't want stockholders to be put in a position, however unlikely, that the deal fails and the company remains under the direction of the incumbent board for at least another 12 months," Ackman added.

Shareholders will be asked to vote on the election of seven directors to Ceridian's board at the annual meeting.

According to the release, Pershing's board nominees will support the proposed buyout and have no plans to make management changes pending the transaction's close, expected in the fourth quarter.

Previously, the investment adviser had asked Ceridian to consider a sale of the company, a sponsored spinoff or an improved recapitalization plan rather than sell the company for $36 per share. At the time, Pershing reported beneficial ownership of 21,432,734 shares, or 14.9%, of the Minneapolis-based information services company.

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

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