Ceridian Corporation Awaits Pershing 'Approval'

Ceridian Corporation (CEN) and Pershing Square Capital have continued their war of words over the last few weeks, with Pershing maintaining that it supports the transaction while still pushing its slate of directors to replace the current CEN Board. The verbal sparring has been effective for Pershing, as it has resulted in Institutional Shareholder Services (a busy entity of late) issuing a recommendation for Pershing's Board nominees.

In response, CEN has disclosed the following regarding Pershing's proposals:

Replacing the current Board introduces significant and unnecessary risk to completion of the merger. THL Partners and FNF have communicated to us their view that election of Pershing Square nominees would introduce additional risks to the pending transaction. Further, THL Partners and FNF have indicated strong support for Kathryn Marinello and her management team and believe they are essential to Ceridian and its ongoing business and operations.

If nothing else, the repetitive use of the term 'risk' in association with a deal that is nearing completion and is clearly a fair offer should provide the desired impact for CEN. Although this is a somewhat unusual development in that a major shareholder is supporting the transaction, but opposing the board, there currently seems to be very little chance that this deal is actually in any danger of falling through.

The September 12 shareholder meeting will be extremely interesting in this case, but should result in CEN shareholder approval despite any volatility that may surface. THL's claim of "additional risks" is perceived as mostly a smokescreen to increase the chances of maintaining status quo as the deal is consummated. But even if Pershing is able to remove certain CEN Board members, it is almost inconceivable that THL, et al. will abandon the deal if CEN shareholder approval is obtained next week.

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