The battle between Bill Ackman and Automatic Data Processing will not end quietly.
Payroll processor ADP said Monday that it won’t nominate the activist investor’s candidates to its board, setting the stage for an expensive proxy battle.
In a cheeky rebuke, ADP said the three nominees submitted by Ackman’s Pershing Square hedge fund — including Ackman himself —lacked “additive skills or experience.”
“Unlike Mr. Ackman’s nominees, ADP’s directors have a deep understanding and appreciation of the current state of ADP’s business and its clients,” ADP chairman John Jones said in a statement Monday.
Ackman, predictably, was not pleased.
“The fact that the board believes that the company’s largest owner with an 8.3-percent stake does not deserve even one board seat speaks to their insularity and lack of shareholder perspective,” Ackman said in a statement.
ADP offered to meet with Ackman to discuss ideas, but the hedgie appeared more interested in securing an extension to nominate directors, ADP CEO Carlos Rodriguez said in an interview with CNBC Monday evening.
Rodriguez said Ackman told him he needed “the threat of launching a proxy contest in order to get you guys to agree to the things that I want to do.”
Pershing Square denied Rodriguez’s characterization.
ADP’s decision comes just a few days after Ackman hosted a three-and-a-half- hour call with analysts and investors, in which he ticked off ADP’s deficiencies and areas for improvement, which include replacing Rodriguez.
Rodriguez called Ackman a “spoiled brat” in a televised interview earlier this month after the hedgie requested an extension to nominate board members.
Pershing Square announced its ADP stake earlier this month. The hedge fund had to play defense, however, as ADP pre-empted Pershing Square’s disclosure by saying Ackman sought control of the company.
“I think this thing got off on the wrong track,” Ackman said on Thursday’s call.
With the right changes — including streamlining operations — ADP’s stock could double within four years, Ackman said Thursday. But investors balked, sending the shares tumbling more than 5 percent during his presentation.