-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, K2ooecQ9Ia55KcIrCQ42wqS5B25kQg7wz/lRlQdMyAn73mMUpHuROQTyVbkPob5y jN4dvdUH11LrLVIitQ7o6w== 0000891836-07-000016.txt : 20070118 0000891836-07-000016.hdr.sgml : 20070118 20070118060044 ACCESSION NUMBER: 0000891836-07-000016 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 20070118 DATE AS OF CHANGE: 20070118 GROUP MEMBERS: PERSHING SQUARE GP, LLC GROUP MEMBERS: PS MANAGEMENT GP, LLC GROUP MEMBERS: WILLIAM A. ACKMAN SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: CERIDIAN CORP /DE/ CENTRAL INDEX KEY: 0001124887 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MANAGEMENT CONSULTING SERVICES [8742] IRS NUMBER: 411981625 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-61527 FILM NUMBER: 07536370 BUSINESS ADDRESS: STREET 1: 3311 E OLD SHAKOPEE RD CITY: MINNEAPOLIS STATE: MN ZIP: 55425 BUSINESS PHONE: 9528538100 MAIL ADDRESS: STREET 1: 3311 EAST OLD SHAKOPEE RD CITY: MINNEAPOLIS STATE: MN ZIP: 55425 FORMER COMPANY: FORMER CONFORMED NAME: NEW CERIDIAN CORP DATE OF NAME CHANGE: 20000927 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: Pershing Square Capital Management, L.P. CENTRAL INDEX KEY: 0001336528 IRS NUMBER: 383694136 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 888 SEVENTH AVENUE STREET 2: 29TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10019 BUSINESS PHONE: 212-813-3700 MAIL ADDRESS: STREET 1: 888 SEVENTH AVENUE STREET 2: 29TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10019 SC 13D 1 sc0007.txt SCHEDULE 13D UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 Ceridian Corporation --------------------------------------------------------------------- (Name of Issuer) Common Stock, par value $0.01 per share --------------------------------------------------------------------- (Title of Class of Securities) 156779100 --------------------------------------------------------------------- (CUSIP Number) Roy J. Katzovicz Pershing Square Capital Management, L.P. 888 Seventh Avenue, 29th Floor New York, NY 10019 212-813-3700 with a copy to: Alan J. Sinsheimer Sullivan & Cromwell LLP 125 Broad Street New York, NY 10004-2498 212-558-4000 and Janet T. Geldzahler Sullivan & Cromwell LLP 1701 Pennsylvania Avenue, N.W. Washington, D.C. 20006-5805 202-956-7500 --------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) January 12, 2007 --------------------------------------------------------------------- (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Sections 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box: [X] NOTE: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See ss.240.13d-7 for other parties to whom copies are to be sent. * The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). CUSIP No. 156779100 - -------------------------------------------------------------------------------- 1 Name of Reporting Persons I.R.S. Identification Nos. of Above Persons (entities only) Pershing Square Capital Management, L.P. - -------------------------------------------------------------------------------- 2 Check the Appropriate Box if a Member of a Group (See instructions) (a) [ ] (b) [X] - -------------------------------------------------------------------------------- 3 SEC Use Only - -------------------------------------------------------------------------------- 4 Source of Funds (See Instructions) OO - -------------------------------------------------------------------------------- 5 Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) [ ] - -------------------------------------------------------------------------------- 6 Citizenship or Place of Organization Delaware - -------------------------------------------------------------------------------- 7 Sole Voting Power -0- Number of ---------------------------------------------------- Shares 8 Shared Voting Power Beneficially 15,724,334 Owned by Each ---------------------------------------------------- Reporting 9 Sole Dispositive Power Person With -0- ---------------------------------------------------- 10 Shared Dispositive Power 15,724,334 - -------------------------------------------------------------------------------- 11 Aggregate Amount Beneficially Owned by Each Reporting Person 15,724,334 - -------------------------------------------------------------------------------- 12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) [ ] - -------------------------------------------------------------------------------- 13 Percent of Class Represented by Amount in Row (11) 11.3%(1) - -------------------------------------------------------------------------------- 14 Type of Reporting Person (See Instructions) IA - -------------------------------------------------------------------------------- - ---------- (1) Calculated based on 139,124,108 shares of the common stock, par value $0.01, of Ceridian Corporation outstanding as of October 31, 2006, as reported in Ceridian Corporation's quarterly report on Form 10-Q for the quarterly period ended September 30, 2006. CUSIP No. 156779100 - -------------------------------------------------------------------------------- 1 Name of Reporting Persons I.R.S. Identification Nos. of Above Persons (entities only) PS Management GP, LLC - -------------------------------------------------------------------------------- 2 Check the Appropriate Box if a Member of a Group (See instructions) (a) [ ] (b) [X] - -------------------------------------------------------------------------------- 3 SEC Use Only - -------------------------------------------------------------------------------- 4 Source of Funds (See Instructions) OO - -------------------------------------------------------------------------------- 5 Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) [ ] - -------------------------------------------------------------------------------- 6 Citizenship or Place of Organization Delaware - -------------------------------------------------------------------------------- 7 Sole Voting Power -0- Number of ---------------------------------------------------- Shares 8 Shared Voting Power Beneficially 15,724,334 Owned by Each ---------------------------------------------------- Reporting 9 Sole Dispositive Power Person With -0- ---------------------------------------------------- 10 Shared Dispositive Power 15,724,334 - -------------------------------------------------------------------------------- 11 Aggregate Amount Beneficially Owned by Each Reporting Person 15,724,334 - -------------------------------------------------------------------------------- 12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) [ ] - -------------------------------------------------------------------------------- 13 Percent of Class Represented by Amount in Row (11) 11.3%(2) - -------------------------------------------------------------------------------- 14 Type of Reporting Person (See Instructions) OO - -------------------------------------------------------------------------------- - ---------- (2) Calculated based on 139,124,108 shares of the common stock, par value $0.01, of Ceridian Corporation outstanding as of October 31, 2006, as reported in Ceridian Corporation's quarterly report on Form 10-Q for the quarterly period ended September 30, 2006. CUSIP No. 156779100 - -------------------------------------------------------------------------------- 1 Name of Reporting Persons I.R.S. Identification Nos. of Above Persons (entities only) Pershing Square GP, LLC - -------------------------------------------------------------------------------- 2 Check the Appropriate Box if a Member of a Group (See instructions) (a) [ ] (b) [X] - -------------------------------------------------------------------------------- 3 SEC Use Only - -------------------------------------------------------------------------------- 4 Source of Funds (See Instructions) OO - -------------------------------------------------------------------------------- 5 Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) [ ] - -------------------------------------------------------------------------------- 6 Citizenship or Place of Organization Delaware - -------------------------------------------------------------------------------- 7 Sole Voting Power -0- Number of ---------------------------------------------------- Shares 8 Shared Voting Power Beneficially 15,724,334 Owned by Each ---------------------------------------------------- Reporting 9 Sole Dispositive Power Person With -0- ---------------------------------------------------- 10 Shared Dispositive Power 15,724,334 - -------------------------------------------------------------------------------- 11 Aggregate Amount Beneficially Owned by Each Reporting Person 15,724,334 - -------------------------------------------------------------------------------- 12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) [ ] - -------------------------------------------------------------------------------- 13 Percent of Class Represented by Amount in Row (11) 11.3%(3) - -------------------------------------------------------------------------------- 14 Type of Reporting Person (See Instructions) IA - -------------------------------------------------------------------------------- - ---------- (3) Calculated based on 139,124,108 shares of the common stock, par value $0.01, of Ceridian Corporation outstanding as of October 31, 2006, as reported in Ceridian Corporation's quarterly report on Form 10-Q for the quarterly period ended September 30, 2006. CUSIP No. 156779100 - -------------------------------------------------------------------------------- 1 Name of Reporting Persons I.R.S. Identification Nos. of Above Persons (entities only) William A. Ackman - -------------------------------------------------------------------------------- 2 Check the Appropriate Box if a Member of a Group (See instructions) (a) [ ] (b) [X] - -------------------------------------------------------------------------------- 3 SEC Use Only - -------------------------------------------------------------------------------- 4 Source of Funds (See Instructions) OO - -------------------------------------------------------------------------------- 5 Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) [ ] - -------------------------------------------------------------------------------- 6 Citizenship or Place of Organization United States - -------------------------------------------------------------------------------- 7 Sole Voting Power -0- Number of ---------------------------------------------------- Shares 8 Shared Voting Power Beneficially 15,724,334 Owned by Each ---------------------------------------------------- Reporting 9 Sole Dispositive Power Person With -0- ---------------------------------------------------- 10 Shared Dispositive Power 15,724,334 - -------------------------------------------------------------------------------- 11 Aggregate Amount Beneficially Owned by Each Reporting Person 15,724,334 - -------------------------------------------------------------------------------- 12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) [ ] - -------------------------------------------------------------------------------- 13 Percent of Class Represented by Amount in Row (11) 11.3%(4) - -------------------------------------------------------------------------------- 14 Type of Reporting Person (See Instructions) IN - -------------------------------------------------------------------------------- - ---------- (4) Calculated based on 139,124,108 shares of the common stock, par value $0.01, of Ceridian Corporation outstanding as of October 31, 2006, as reported in Ceridian Corporation's quarterly report on Form 10-Q for the quarterly period ended September 30, 2006. ITEM 1. SECURITY AND ISSUER. This statement on Schedule 13D (this "Statement") relates to the common stock, par value $0.01 per share (the "Common Stock"), of Ceridian Corporation, a Delaware corporation (the "Issuer"). The address of the principal executive offices of the Issuer is 3311 East Old Shakopee Road, Minneapolis, Minnesota 55425. ITEM 2. IDENTITY AND BACKGROUND. (a) , (f) This Statement is being filed by Pershing Square Capital Management, L.P., a Delaware limited partnership ("Pershing Square"), PS Management GP, LLC, a Delaware limited liability company ("PS Management"), Pershing Square GP, LLC, a Delaware limited liability company ("Pershing Square GP"), and William A. Ackman, a citizen of the United States of America (collectively, the "Reporting Persons"). The Reporting Persons have entered into a joint filing agreement, dated as of January 18, 2007, a copy of which is attached hereto as Exhibit 99.1. (b) The address of the principal business and principal office of each of the Reporting Persons is 888 Seventh Avenue, 29th Floor, New York, New York 10019. (c) Pershing Square's principal business is serving as investment advisor to certain affiliated funds. PS Management's principal business is serving as the sole general partner of Pershing Square. Pershing Square GP's principal business is serving as the sole general partner of Pershing Square, L.P., a Delaware limited partnership, and Pershing Square II, L.P., a Delaware limited partnership. The principal occupation of William A. Ackman is serving as the managing member of each of PS Management and Pershing Square GP. (d) , (e) During the last five years, none of the Reporting Persons (i) has been convicted in a criminal proceeding or (ii) was a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violations with respect to such laws. ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION. Pershing Square advises three client accounts, including the accounts of Pershing Square, L.P., Pershing Square II, L.P. and Pershing Square International, Ltd., a Cayman Islands exempted company (collectively, the "Pershing Square Funds"), which purchased an aggregate of 15,724,334 shares of the Common Stock for a total consideration (including brokerage commissions) of $380,484,101 derived from the capital of the Pershing Square Funds. ITEM 4. PURPOSE OF TRANSACTION. (a)-(j) The Reporting Persons have filed this Statement to reflect their intent to nominate directors to the Issuer's board of directors. On January 18, 2007, representatives of the Reporting Persons delivered a letter to the Issuer's board of directors in the form attached to this Statement as Exhibit 99.2. Exhibit 99.2 is incorporated by reference into this Item 4 as if restated in full. In addition to the foregoing matters, the Reporting Persons intend to review their holdings in the Issuer on a continuing basis. As part of this ongoing review, the Reporting Persons have engaged or may in the future engage, legal and financial advisors to assist them in such review and in evaluating strategic alternatives that are or may become available with respect to the Issuer. Depending upon, among other things, current and anticipated future trading prices for the Issuer's equity, the financial condition, results of operations and prospects of the Issuer and its businesses, general economic, market and industry conditions, and the Reporting Persons' overall investment portfolio, strategic objectives and financial condition, the Reporting Persons may from time to time consider a number of possible alternative strategies for enhancing the value of their investment in the Issuer, enhancing the value of the Issuer's assets or enhancing the value of the Reporting Persons' assets through the involvement of the Issuer, or other extraordinary matters relating to the Issuer, including, among other things,(i) continued ownership of the Issuer's equity currently beneficially owned by the Reporting Persons; (ii) acquiring additional securities of the Issuer in the open market, in privately negotiated transactions or otherwise; (iii) a sale or transfer of a material amount of assets of the Issuer and/or any of its affiliates; (iv) proposing or seeking to take control of the Issuer, including but not limited to through solicitation of proxies to elect the nominees of the Reporting Persons' affiliates to the board of directors of the Issuer, or otherwise effect an extraordinary corporate transaction such as a spin-off, acquisition, merger, tender offer, exchange offer, recapitalization, reorganization or liquidation involving the Issuer or any of its subsidiaries and/or affiliates or assets; or (v) proposing or effecting any other transaction or matter that would constitute or result in any of the transactions, matters or effects enumerated in Item 4(a)-(j) of Schedule 13D. There can be no assurance that the Reporting Persons will pursue any of the matters set forth above. Moreover, there can be no assurance that the Reporting Persons will or will not develop any alternative plans or proposals with respect to any of the foregoing matters or take any particular action or actions with respect to some or all of their holdings in the Issuer, or as to the timing of any such matters should they be so pursued by the Reporting Persons. The Reporting Persons reserve the right, at any time and in each Reporting Person's sole discretion, to take or refrain from taking any of the actions set forth above. Except as contemplated in this Item 4, the Reporting Persons have no plans or proposals of the types referred to in clauses (a) through (j) of Item 4 of Schedule 13D. ITEM 5. INTEREST IN SECURITIES OF THE ISSUER. (a), (b) Based upon the Issuer's quarterly report on Form 10-Q for the quarterly period ended September 30, 2006, there were 139,124,108 shares of the Common Stock outstanding as of October 31, 2006. Based on the foregoing, the 15,724,334 shares of the Common Stock (the "Subject Shares") beneficially owned by the Reporting Persons represent approximately 11.3% of the shares of the Common Stock issued and outstanding. Pershing Square, as the investment adviser to the Pershing Square Funds, may be deemed to have the shared power to vote or direct the vote of (and the shared power to dispose or direct the disposition of) the Subject Shares. As the general partner of Pershing Square, PS Management may be deemed to have the shared power to vote or to direct the vote of (and the shared power to dispose or direct the disposition of) the Subject Shares. As the general partner of Pershing Square, L.P. and Pershing Square II, L.P., Pershing Square GP may be deemed to have the shared power to vote or to direct the vote of (and the shared power to dispose or direct the disposition of) 6,985,675 shares of the Common Stock owned by Pershing Square, L.P. and Pershing Square II, L.P. By virtue of William A. Ackman's position as managing member of each of PS Management and Pershing Square GP, William A. Ackman may be deemed to have the shared power to vote or direct the vote of (and the shared power to dispose or direct the disposition of) the Subject Shares and, therefore, William A. Ackman may be deemed to be the beneficial owner of the Subject Shares. As of the date hereof, none of the Reporting Persons owns any shares of the Common Stock other than the Subject Shares covered in this Statement. (c) See trading data attached hereto as Exhibit 99.3. Exhibit 99.3 is incorporated by reference into this Item 5(c) as if restated in full. Except as set forth in Exhibit 99.3 attached hereto, within the last 60 days, no other transactions in shares of the Common Stock were effected by any Reporting Person. (d) No other person is known to the Reporting Persons to have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the shares of the Common Stock covered by this Statement, except that dividends from, and proceeds from the sale of, the shares of the Common Stock held by the accounts managed by Pershing Square may be delivered to such accounts. (e) Not applicable. ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER. To the knowledge of the Reporting Persons, except for the matters described herein, the Reporting Persons have no contract, arrangement, understanding or relationship (legal or otherwise) among the Reporting Persons or between the Reporting Persons and any other person with respect to any securities of the Issuer. ITEM 7. MATERIAL TO BE FILED AS EXHIBITS. Exhibit 99.1 Joint Filing Agreement, dated as of January 18, 2007, among Pershing Square Capital Management, L.P., PS Management GP, LLC, Pershing Square GP, LLC and William A. Ackman. Exhibit 99.2 Letter to the Board of Directors of Ceridian Corporation dated January 18, 2007. Exhibit 99.3 Trading data of the transactions in the Common Stock that were effected during the past 60 days. SIGNATURES After reasonable inquiry and to the best of our knowledge and belief, the undersigned certify that the information set forth in this statement is true, complete and correct. Dated: January 18, 2007 PERSHING SQUARE CAPITAL MANAGEMENT, L.P. By: PS Management GP, LLC, its General Partner By: /s/ William A. Ackman ----------------------------------- William A. Ackman Managing Member PS MANAGEMENT GP, LLC By: /s/ William A. Ackman ----------------------------------- William A. Ackman Managing Member PERSHING SQUARE GP, LLC By: /s/ William A. Ackman ----------------------------------- William A. Ackman Managing Member /s/ William A. Ackman ----------------------------------- WILLIAM A. ACKMAN EXHIBIT INDEX Exhibit Description - ----------- ----------------------------------------------------------------- 99.1 Joint Filing Agreement, dated as of January 18, 2007, among Pershing Square Capital Management, L.P., PS Management GP, LLC, Pershing Square GP, LLC and William A. Ackman. 99.2 Letter to the Board of Directors of Ceridian Corporation dated January 18, 2007. 99.3 Trading data of the transactions in the Common Stock that were effected during the past 60 days. EX-99.1 2 ex99-1.txt JOINT FILING AGREEMENT EXHIBIT 99.1 JOINT FILING AGREEMENT In accordance with Rule 13d-1(k)(1) under the Securities Exchange Act of 1934, as amended, each of the undersigned hereby agrees to the joint filing, along with all other such undersigned, on behalf of the Reporting Persons (as defined in the joint filing), of a statement on Schedule 13D (including amendments thereto) with respect to the common stock, par value $0.01 per share, of Ceridian Corporation, and that this agreement be included as an Exhibit to such joint filing. This agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument. IN WITNESS WHEREOF, each of the undersigned hereby executes this agreement as of this 18th day of January, 2007. PERSHING SQUARE CAPITAL MANAGEMENT, L.P. By: PS Management GP, LLC, its General Partner By: /s/ William A. Ackman ----------------------------------- William A. Ackman Managing Member PS MANAGEMENT GP, LLC By: /s/ William A. Ackman ----------------------------------- William A. Ackman Managing Member PERSHING SQUARE GP, LLC By: /s/ William A. Ackman ----------------------------------- William A. Ackman Managing Member /s/ William A. Ackman ----------------------------------- WILLIAM A. ACKMAN EX-99.2 3 ex99-2.txt LETTER TO THE BOARD OF DIRECTORS EXHIBIT 99.2 [PERSHING SQUARE LETTERHEAD] Board of Directors Ceridian Corporation Headquarters 3311 E. Old Shakopee Road Minneapolis, MN 55425 January 18, 2007 Ladies and Gentlemen: As you are likely aware, Pershing Square Capital Management, L.P. and certain of its affiliates own approximately 11.3% of Ceridian's outstanding stock. We are writing to express concern about a number of recent developments that have caused us to reconsider the passive nature of our investment in the company. We have followed Ceridian for some time. In our view, Ceridian has underperformed and failed to achieve its business potential for more than a decade. We believe that this view is widely shared by the investment and analyst communities. We also believe that the fundamental value of Ceridian substantially exceeds the value implied by its current share price. Furthermore, we are confident that, properly managed, the company offers the opportunity for shareholders to earn extraordinary returns. As a result of our view of the company's undervaluation and the board's decision to replace the prior CEO, we initiated an investment in Ceridian with the expectation that the board and new management would pursue the low-risk, high-return strategy afforded by the company's current circumstance. To that end, we were cautiously optimistic when Kathryn Marinello was hired as CEO. That being said, we were somewhat surprised that the board hired a CEO with no experience in payroll or human resource services, but rather with a background principally focused on payments and trucking - industry experience most relevant to Ceridian's well-functioning Comdata division. At a minimum, however, we thought management change would be a significant positive for the company. We had originally intended to hold Ceridian shares as a passive investment. However, two recent events have caused us to reconsider our intent. First, we now find ourselves very concerned that Comdata, which represents the majority of Ceridian's cash flow and equity value, may be on the verge of losing its President, whom we believe is very important to the successful operation of that business. Second, based on our recent meeting with Ms. Marinello, we now Board of Directors, Ceridian Corporation January 18, 2007 Page 2 of 4 fear that Ceridian as a whole may pursue a completely different strategic direction than what we or any other shareholder would have reasonably anticipated or desired. POTENTIAL LOSS OF COMDATA SENIOR MANAGEMENT - ------------------------------------------- Comdata is Ceridian's best performing and most valuable operating subsidiary. Late last week, we were surprised to learn that the continued employment of senior Comdata management, in particular its President, Gary Krow, may be in jeopardy. We are of the view that Mr. Krow's departure from Comdata may substantially reduce the value of Comdata and thereby Ceridian. We further believe that his exit could be followed by the departure of other key managers, causing a further significant diminution in value. The prospect of losing Comdata's President and other senior operating management poses an unacceptable risk to our investment. POTENTIAL CHANGES TO CERIDIAN'S STRATEGIC DIRECTION - --------------------------------------------------- Shortly after Ms. Marinello joined Ceridian in October, we attempted to arrange a meeting with her, but we were told that we would not be able to do so until January. Last Friday, we attended a three-hour meeting at Ceridian headquarters with Ms. Marinello. This was the first opportunity afforded to us to meet or speak with Ms. Marinello since her appointment as CEO. In the meeting, Ms. Marinello came across as a hardworking, direct, and experienced executive. In other respects, however, we were alarmed by what we learned. During the course of the meeting, we were surprised to hear that Ms. Marinello does not share our concern about the potential loss of Mr. Krow. As important, however, we left the meeting with the understanding that Ms. Marinello currently intends to retain Comdata as a captive subsidiary and may leverage its cash flow and balance sheet to invest in or acquire diversified businesses, potentially on a global basis. In other words, rather than management exclusively focusing on the company's flagging HRS operations and liberating Comdata - an unrelated, high-quality, faster growing business that would benefit greatly from independence - it appears that Ceridian may pursue a conglomerate holding company strategy. When we pressed on the subject of the future of Comdata, Ms. Marinello was appropriately careful to state that she had not yet made a final decision in that regard and that such a decision could take upwards of 18 months to explore. She did indicate, however, that a Comdata spinoff would necessarily reduce Ceridian's market capitalization, and therefore limit the size of the acquisitions that the company could pursue. These comments are troubling to us as we are strongly of the view that size should take a backseat to growth in the per-share value of Ceridian. In our view, an acquisition-driven conglomerate strategy would be a serious mistake for Ceridian and its shareholders. We believe that such a strategy is unlikely to increase shareholder value without undue risk. This is particularly true in light of the current acquisition environment Board of Directors, Ceridian Corporation January 18, 2007 Page 3 of 4 which is characterized by extremely competitive auctions and well-capitalized private equity and corporate acquirers. In addition, Ceridian possesses few if any competitive advantages in making acquisitions. We believe that there are few successful conglomerates other than GE and Berkshire Hathaway, and even these superb companies were created over many years during much more favorable acquisition environments. We believe strongly that Ceridian should be run with the objective of increasing shareholder value, rather than growing assets under management. Therefore, we are of the view that the company should pursue a materially different and simpler, higher-return, lower-risk corporate strategy that will best serve shareholders, customers, and employees. OUR VIEWS - --------- As a first step, we believe that Ceridian should spin off Comdata to its shareholders. We believe - and expect the substantial majority of the company's shareholders and the investment community agree - that the logic of separating Comdata from Ceridian is so overwhelming that it is a business imperative. Comdata's business is materially different from that of the balance of Ceridian's operations, is managed by a distinct management team, and is located in a different geography. Its employees have not been adequately compensated for their achievements because the equity compensation they receive in the form of stock options on Ceridian has been diluted by HRS's long-term underperformance. Beyond the strategic imperative, Comdata's growth, margin, and cash flow characteristics deserve a materially higher valuation than the current value the market assigns to Ceridian in its current configuration. As a result, we believe the spinoff of Comdata would generate significant value in the intermediate and long term for all of Ceridian's stakeholders. In the more than 11 years that Ceridian has owned Comdata, Ceridian has yet to identify any meaningful synergies between its two principal operating units. When we raised the subject with Ms. Marinello, she was unable to cite any such synergies, but postulated that some day Comdata could sell payment products to HRS customers. In response, we pointed out that if Comdata continued as a wholly owned subsidiary of Ceridian, the potential market opportunity for its products would be diminished because ADP (and other competing payroll companies that offer a much larger potential market for such a product) would be unlikely to choose to purchase that product from a Ceridian-owned Comdata. During our meeting with Ms. Marinello, she suggested that there were a number of acquisition opportunities which might make strategic sense for Comdata. While we acknowledge that this may be true depending upon the terms and other specifics, we believe that Comdata will be in a much stronger competitive position in making acquisitions if it is a standalone pure-play enterprise that can use its likely-to-be highly valued equity currency in pursuing such transactions. Board of Directors, Ceridian Corporation January 18, 2007 Page 4 of 4 We believe it is self-evident that Comdata's long-term value would be maximized as an independent company. In addition, the ability to reward its management with equity incentives that are directly tied to the performance of its business would be an invaluable tool to retain and attract talented individuals, and may obviate some of the personnel risks highlighted earlier. With regard to HRS, we believe Ceridian management should focus on improving its remarkably low operating margins, its lackluster customer service record, weakness in its sales organization, and deficiencies in its technology infrastructure. These basic operational improvements would provide more than ample opportunity to enhance long-term value for all of Ceridian's stakeholders, including shareholders, customers, and employees alike. Furthermore, the intelligent use of the company's free cash flow and borrowing capacity created by a dramatically improved, rationalized, and standalone HRS business will further enhance shareholder returns over the long term. These goals should command the full focus of Ceridian's senior management for the foreseeable future. In addition, this strategy is materially less risky than expanding an operationally challenged business through acquisitions. In light of recent events, we feel that we can no longer remain a passive Ceridian shareholder. We would have greatly preferred to voice our concerns in a less public arena. Given what we have learned over the past week, coupled with the imminent deadline under Ceridian's unusually early advance notice provision regarding the nomination of directors, we are compelled to act now to protect our investment. As a consequence, we currently intend to nominate a slate of alternative directors at the company's upcoming meeting of shareholders and provide the requisite notice on or before the January 23, 2007 deadline. We welcome the opportunity to commence discussions with you in advance of the director nomination notice deadline regarding the matters discussed in this letter. We would appreciate a response at your earliest convenience. PERSHING SQUARE CAPITAL MANAGEMENT, L.P. Very truly yours, /s/ William A. Ackman William A. Ackman cc: Alan J. Sinsheimer, Sullivan & Cromwell LLP Janet T. Geldzahler, Sullivan & Cromwell LLP EX-99.3 4 ex99-3.txt TRADING DATA EXHIBIT 99.3
TRAN TRADE SETTLE UNIT TRADE CODE SECURITY DATE DATE QUANTITY COST AMOUNT - ------------------------------------------------------------------------------------------------ PERSHING SQUARE INTERNATIONAL, LTD. - ---------------------------------- BUY CERIDIAN CORPORATION 11/20/2006 11/24/2006 56,133 $ 24.75 $ 1,389,011 BUY CERIDIAN CORPORATION 11/21/2006 11/27/2006 11,736 $ 24.76 $ 290,582 BUY CERIDIAN CORPORATION 11/21/2006 11/27/2006 13,985 $ 24.71 $ 345,499 BUY CERIDIAN CORPORATION 11/27/2006 11/30/2006 93,330 $ 24.43 $ 2,280,192 BUY CERIDIAN CORPORATION 11/27/2006 11/30/2006 14,073 $ 24.44 $ 343,944 BUY CERIDIAN CORPORATION 11/27/2006 11/30/2006 14,636 $ 24.44 $ 357,704 BUY CERIDIAN CORPORATION 11/28/2006 12/1/2006 50,703 $ 24.29 $ 1,231,708 BUY CERIDIAN CORPORATION 11/28/2006 12/1/2006 18,069 $ 24.26 $ 438,264 BUY CERIDIAN CORPORATION 11/28/2006 12/1/2006 42,218 $ 24.30 $ 1,026,108 BUY CERIDIAN CORPORATION 11/29/2006 12/4/2006 44,153 $ 24.55 $ 1,084,124 BUY CERIDIAN CORPORATION 11/29/2006 12/4/2006 14,073 $ 24.22 $ 340,848 BUY CERIDIAN CORPORATION 11/29/2006 12/4/2006 111,918 $ 24.37 $ 2,726,994 BUY CERIDIAN CORPORATION 11/30/2006 12/5/2006 132,723 $ 24.45 $ 3,245,250 BUY CERIDIAN CORPORATION 12/1/2006 12/6/2006 13,667 $ 24.57 $ 335,798 BUY CERIDIAN CORPORATION 12/1/2006 12/6/2006 115,336 $ 24.56 $ 2,832,998 BUY CERIDIAN CORPORATION 12/4/2006 12/6/2006 13,667 $ 24.94 $ 340,855 BUY CERIDIAN CORPORATION 12/4/2006 12/6/2006 1,476 $ 24.62 $ 36,337 BUY CERIDIAN CORPORATION 12/4/2006 12/6/2006 42,611 $ 24.82 $ 1,057,520 BUY CERIDIAN CORPORATION 12/5/2006 12/8/2006 104,520 $ 25.19 $ 2,632,671 BUY CERIDIAN CORPORATION 12/5/2006 12/8/2006 27,347 $ 25.08 $ 685,931 BUY CERIDIAN CORPORATION 12/6/2006 12/11/2006 37,928 $ 25.38 $ 962,506 BUY CERIDIAN CORPORATION 12/6/2006 12/11/2006 109,304 $ 25.45 $ 2,782,202 BUY CERIDIAN CORPORATION 12/6/2006 12/11/2006 127,831 $ 25.50 $ 3,259,716 BUY CERIDIAN CORPORATION 12/7/2006 12/12/2006 41,005 $ 25.57 $ 1,048,428 BUY CERIDIAN CORPORATION 12/7/2006 12/12/2006 142,150 $ 25.58 $ 3,636,126 BUY CERIDIAN CORPORATION 12/8/2006 12/13/2006 1,312 $ 25.40 $ 33,325 BUY CERIDIAN CORPORATION 12/8/2006 12/13/2006 116,799 $ 25.55 $ 2,983,759 BUY CERIDIAN CORPORATION 12/11/2006 12/14/2006 27,312 $ 25.75 $ 703,216 BUY CERIDIAN CORPORATION 12/11/2006 12/14/2006 224,399 $ 25.73 $ 5,774,011 BUY CERIDIAN CORPORATION 12/12/2006 12/15/2006 177,807 $ 25.78 $ 4,583,936 BUY CERIDIAN CORPORATION 12/12/2006 12/15/2006 142,246 $ 25.79 $ 3,669,236 BUY CERIDIAN CORPORATION 12/13/2006 12/18/2006 73,139 $ 25.74 $ 1,882,408 BUY CERIDIAN CORPORATION 12/13/2006 12/18/2006 54,694 $ 25.78 $ 1,409,875 BUY CERIDIAN CORPORATION 12/13/2006 12/18/2006 120,545 $ 25.83 $ 3,113,448 BUY CERIDIAN CORPORATION 12/13/2006 12/18/2006 2,680 $ 25.83 $ 69,226 BUY CERIDIAN CORPORATION 12/14/2006 12/19/2006 43,257 $ 26.21 $ 1,133,788 BUY CERIDIAN CORPORATION 12/14/2006 12/19/2006 27,333 $ 26.21 $ 716,330 BUY CERIDIAN CORPORATION 12/14/2006 12/19/2006 109,332 $ 26.21 $ 2,865,384 BUY CERIDIAN CORPORATION 12/18/2006 12/21/2006 2,845 $ 26.19 $ 74,500 BUY CERIDIAN CORPORATION 12/18/2006 12/21/2006 32,490 $ 26.37 $ 856,755 BUY CERIDIAN CORPORATION 12/18/2006 12/21/2006 27,349 $ 26.24 $ 717,638 --------- 2,578,131 =========
PERSHING SQUARE, L.P. - --------------------- BUY CERIDIAN CORPORATION 11/20/2006 11/24/2006 15,250 $ 24.60 $ 375,222 BUY CERIDIAN CORPORATION 11/20/2006 11/24/2006 42,954 $ 24.74 $ 1,062,897 BUY CERIDIAN CORPORATION 11/21/2006 11/27/2006 10,762 $ 24.70 $ 265,875 BUY CERIDIAN CORPORATION 11/21/2006 11/27/2006 36,232 $ 24.76 $ 897,101 BUY CERIDIAN CORPORATION 11/27/2006 11/30/2006 115,670 $ 24.43 $ 2,825,992 BUY CERIDIAN CORPORATION 11/27/2006 11/30/2006 10,927 $ 24.44 $ 267,056 BUY CERIDIAN CORPORATION 11/27/2006 11/30/2006 11,364 $ 24.44 $ 277,736 BUY CERIDIAN CORPORATION 11/28/2006 12/1/2006 39,371 $ 24.29 $ 956,424 BUY CERIDIAN CORPORATION 11/28/2006 12/1/2006 14,031 $ 24.26 $ 340,322 BUY CERIDIAN CORPORATION 11/28/2006 12/1/2006 32,782 $ 24.30 $ 796,767 BUY CERIDIAN CORPORATION 11/29/2006 12/4/2006 34,284 $ 24.55 $ 841,802 BUY CERIDIAN CORPORATION 11/29/2006 12/4/2006 10,927 $ 24.22 $ 264,652 BUY CERIDIAN CORPORATION 11/29/2006 12/4/2006 86,904 $ 24.37 $ 2,117,503 BUY CERIDIAN CORPORATION 11/30/2006 12/5/2006 80,000 $ 24.45 $ 1,956,104 BUY CERIDIAN CORPORATION 12/1/2006 12/6/2006 11,100 $ 24.57 $ 272,727 BUY CERIDIAN CORPORATION 12/1/2006 12/6/2006 93,674 $ 24.56 $ 2,300,914 BUY CERIDIAN CORPORATION 12/4/2006 12/6/2006 11,100 $ 24.94 $ 276,834 BUY CERIDIAN CORPORATION 12/4/2006 12/6/2006 1,199 $ 24.62 $ 29,518 BUY CERIDIAN CORPORATION 12/4/2006 12/6/2006 34,608 $ 24.82 $ 858,901 BUY CERIDIAN CORPORATION 12/5/2006 12/8/2006 84,799 $ 25.19 $ 2,135,934 BUY CERIDIAN CORPORATION 12/5/2006 12/8/2006 22,187 $ 25.08 $ 556,505 BUY CERIDIAN CORPORATION 12/6/2006 12/11/2006 30,823 $ 25.38 $ 782,201 BUY CERIDIAN CORPORATION 12/6/2006 12/11/2006 88,827 $ 25.45 $ 2,260,985 BUY CERIDIAN CORPORATION 12/6/2006 12/11/2006 103,883 $ 25.50 $ 2,649,037 BUY CERIDIAN CORPORATION 12/7/2006 12/12/2006 33,295 $ 25.57 $ 851,297 BUY CERIDIAN CORPORATION 12/7/2006 12/12/2006 115,422 $ 25.58 $ 2,952,437 BUY CERIDIAN CORPORATION 12/8/2006 12/13/2006 1,066 $ 25.40 $ 27,076 BUY CERIDIAN CORPORATION 12/8/2006 12/13/2006 94,932 $ 25.55 $ 2,425,142 BUY CERIDIAN CORPORATION 12/11/2006 12/14/2006 22,221 $ 25.75 $ 572,135 BUY CERIDIAN CORPORATION 12/11/2006 12/14/2006 182,564 $ 25.73 $ 4,697,554 BUY CERIDIAN CORPORATION 12/12/2006 12/15/2006 144,165 $ 25.78 $ 3,716,631 BUY CERIDIAN CORPORATION 12/12/2006 12/15/2006 115,332 $ 25.79 $ 2,974,989 BUY CERIDIAN CORPORATION 12/13/2006 12/18/2006 59,339 $ 25.74 $ 1,527,232 BUY CERIDIAN CORPORATION 12/13/2006 12/18/2006 44,374 $ 25.78 $ 1,143,851 BUY CERIDIAN CORPORATION 12/13/2006 12/18/2006 97,800 $ 25.83 $ 2,525,988 BUY CERIDIAN CORPORATION 12/13/2006 12/18/2006 2,174 $ 25.83 $ 56,156 BUY CERIDIAN CORPORATION 12/14/2006 12/19/2006 35,136 $ 26.21 $ 920,932 BUY CERIDIAN CORPORATION 12/14/2006 12/19/2006 22,201 $ 26.21 $ 581,833 BUY CERIDIAN CORPORATION 12/14/2006 12/19/2006 88,804 $ 26.21 $ 2,327,384 BUY CERIDIAN CORPORATION 12/18/2006 12/21/2006 2,307 $ 26.19 $ 60,412 BUY CERIDIAN CORPORATION 12/18/2006 12/21/2006 26,357 $ 26.37 $ 695,029 BUY CERIDIAN CORPORATION 12/18/2006 12/21/2006 22,186 $ 26.24 $ 582,161 --------- 2,133,333 =========
PERSHING SQUARE II, L.P. - ------------------------ BUY CERIDIAN CORPORATION 11/20/2006 11/24/2006 850 $ 24.60 $ 20,914 BUY CERIDIAN CORPORATION 11/20/2006 11/24/2006 913 $ 24.75 $ 22,592 BUY CERIDIAN CORPORATION 11/21/2006 11/27/2006 253 $ 24.70 $ 6,250 BUY CERIDIAN CORPORATION 11/21/2006 11/27/2006 11,632 $ 24.76 288,007 BUY CERIDIAN CORPORATION 12/1/2006 12/6/2006 233 $ 24.57 $ 5,725 BUY CERIDIAN CORPORATION 12/1/2006 12/6/2006 1,969 $ 24.56 $ 48,365 BUY CERIDIAN CORPORATION 12/4/2006 12/6/2006 233 $ 24.94 $ 5,811 BUY CERIDIAN CORPORATION 12/4/2006 12/6/2006 25 $ 24.60 $ 615 BUY CERIDIAN CORPORATION 12/4/2006 12/6/2006 728 $ 24.82 $ 18,067 BUY CERIDIAN CORPORATION 12/5/2006 12/8/2006 1,781 $ 25.19 $ 44,860 BUY CERIDIAN CORPORATION 12/5/2006 12/8/2006 466 $ 25.08 $ 11,688 BUY CERIDIAN CORPORATION 12/6/2006 12/11/2006 649 $ 25.38 $ 16,470 BUY CERIDIAN CORPORATION 12/6/2006 12/11/2006 1,869 $ 25.45 $ 47,573 BUY CERIDIAN CORPORATION 12/6/2006 12/11/2006 2,186 $ 25.50 $ 55,743 BUY CERIDIAN CORPORATION 12/7/2006 12/12/2006 700 $ 25.57 $ 17,898 BUY CERIDIAN CORPORATION 12/7/2006 12/12/2006 2,428 $ 25.58 $ 62,107 BUY CERIDIAN CORPORATION 12/8/2006 12/13/2006 22 $ 25.40 $ 559 BUY CERIDIAN CORPORATION 12/8/2006 12/13/2006 1,997 $ 25.55 $ 51,016 BUY CERIDIAN CORPORATION 12/11/2006 12/14/2006 467 $ 25.75 $ 12,024 BUY CERIDIAN CORPORATION 12/11/2006 12/14/2006 3,837 $ 25.73 $ 98,730 BUY CERIDIAN CORPORATION 12/12/2006 12/15/2006 3,028 $ 25.78 $ 78,063 BUY CERIDIAN CORPORATION 12/12/2006 12/15/2006 2,422 $ 25.79 $ 62,475 BUY CERIDIAN CORPORATION 12/13/2006 12/18/2006 1,247 $ 25.74 $ 32,095 BUY CERIDIAN CORPORATION 12/13/2006 12/18/2006 932 $ 25.78 $ 24,025 BUY CERIDIAN CORPORATION 12/13/2006 12/18/2006 2,055 $ 25.83 $ 53,077 BUY CERIDIAN CORPORATION 12/13/2006 12/18/2006 46 $ 25.83 $ 1,188 BUY CERIDIAN CORPORATION 12/14/2006 12/19/2006 738 $ 26.21 $ 19,343 BUY CERIDIAN CORPORATION 12/14/2006 12/19/2006 466 $ 26.21 $ 12,213 BUY CERIDIAN CORPORATION 12/14/2006 12/19/2006 1,864 $ 26.21 $ 48,852 BUY CERIDIAN CORPORATION 12/18/2006 12/21/2006 48 $ 26.19 $ 1,257 BUY CERIDIAN CORPORATION 12/18/2006 12/21/2006 553 $ 26.37 $ 14,582 BUY CERIDIAN CORPORATION 12/18/2006 12/21/2006 465 $ 26.24 $ 12,202 --------- 47,102 ========= 4,758,566 =========
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