Ack Attack at Ceridian

Bill Ackman's battle with Ceridian Corp.'s managers just got personal.

In a letter to shareholders, who are scheduled to vote Sept. 12 on a $5.3 billion buyout offer, Ackman not only gives more detail on why he thinks that deal stinks.

In the letter, filed today, he also hammers at senior managers individually, saying they support the buyout not because it is the best deal for shareholders but because it entitles the managers to a $27 million payout.

Ackman, a hedge fund manager who runs Pershing Square Capital Management, also wonders why Ceridian's corporate jet apparently flew chairman L. White Matthews III from Minneapolis, where the payroll-management company is located, to his personal vacation home in Wyoming almost weekly during fly-fishing season.

"All of the above suggest to us that a short-term, sell-out strategy principally serves the interests of the incumbent board and management over the interests of stockholders." Ackman writes.

The missive is the fiercest salvo Ackman has fired at Matthews and the rest of Ceridian's board, but it is not the first. Less than two weeks ago, he had sent another letter claiming that the board had accepted a buyout offer that undervalues the company.

On May 30, Ceridian said it would accept a $5.3 billion buyout proposal from private equity firm THL Partners and insurance company Fidelity National Financial.

Ackman said that offer, at $36 a share, undervalues the company's underlying businesses. He would prefer to spin off Comdata, a profitable division that processes credit card and debit card payments. Management could then focus on improving the payroll services unit HRH, which he says "has been mismanaged for many years."

Ceridian did not immediately respond to Ackman or his letter.

by Mark Stein