In a recent 13D filing with the US Securities and Exchange Commission, Paul Singer‘s Elliott Associates disclosed a letter sent to the board of directors of CDK Global Inc (NASDAQ:CDK), in which it presented its plan regarding the company’s operations. Elliott currently has exposure to 8.6% of CDK’s Global common stock, holding 8.11 million shares, which represent 5.2% of the stock and derivative agreements which represent 3.4% of the stock.
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Elliott considers that CDK Global Inc (NASDAQ:CDK) can improve its EBITDA margin to 42% in 2018 from the current margin of 24%, which would yield a stock price of $81 per share within 14 months.
“CDK has a uniquely attractive business, despite being spun out of ADP with an operational framework and capital structure thatare not optimized for a market-leading vertical software business,” the letter stated.
Elliott considers that CDK Global Inc (NASDAQ:CDK) has not pursued the optimization of its operations and capital structure and the company has “not yet taken any meaningful steps to pursue an optimization of its business operations and capital structure.”
The investor urged CDK Global Inc (NASDAQ:CDK) to implement plans to increase shareholder value, unless the board is interested in exploring the sale of the company.
You can access the original SEC filing and the full text of the letter by clicking here.
Ownership Summary Table
| Name | Sole Voting Power | Shared Voting Power | Sole Dispositive Power | Shared Dispositive Power | Aggregate Amount Owned Power | Percent of Class |
|---|---|---|---|---|---|---|
| Elliott Associates | 2,676,300 | 5,433,700 | 2,676,300 | 5,433,700 | 2,676,300 | 1.7% |
| Elliott International | 5,433,700 | 5,433,700 | 5,433,700 | 3.5% | ||
| Elliott International Capital Advisors Inc | 5,433,700 | 3.5% |
Page 1 of 8 – SEC Filing
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
______________
SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO
RULE 13d-2(a)
(Amendment No. 1)*
CDK Global, Inc.
(Name of Issuer)
Common stock, $0.01 par value
(Title of Class of Securities)
12508E 10 1
(CUSIP Number)
Stephen M. Schultz, Esq.
Kleinberg, Kaplan, Wolff & Cohen, P.C.
551 Fifth Avenue, New York, New York 10176
(212) 986-6000
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
May 4, 2016
(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 Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box. ☐
Note. Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 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 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).
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Page 2 of 8 – SEC Filing
| 1 | NAME OF REPORTING PERSONS Elliott Associates, L.P. | |
| 2 | CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*(a) ☒ (b) ☐ | |
| 3 | SEC USE ONLY | |
| 4 | SOURCE OF FUNDS WC | |
| 5 | CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) ☐ | |
| 6 | CITIZENSHIP OR PLACE OF ORGANIZATION Delaware | |
| NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH | 7 | SOLE VOTING POWER 2,676,300 |
| 8 | SHARED VOTING POWER – 0 – | |
| 9 | SOLE DISPOSITIVE POWER 2,676,300 | |
| 10 | SHARED DISPOSITIVE POWER – 0 – | |
| 11 | AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 2,676,300 | |
| 12 | CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES ☐ | |
| 13 | PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 1.7% | |
| 14 | TYPE OF REPORTING PERSON PN | |
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Page 3 of 8 – SEC Filing
| 1 | NAME OF REPORTING PERSONS Elliott International, L.P. | |
| 2 | CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*(a) ☒ (b) ☐ | |
| 3 | SEC USE ONLY | |
| 4 | SOURCE OF FUNDS WC | |
| 5 | CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) ☐ | |
| 6 | CITIZENSHIP OR PLACE OF ORGANIZATION Cayman Islands, British West Indies | |
| NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH | 7 | SOLE VOTING POWER – 0 – |
| 8 | SHARED VOTING POWER 5,433,700 | |
| 9 | SOLE DISPOSITIVE POWER – 0 – | |
| 10 | SHARED DISPOSITIVE POWER 5,433,700 | |
| 11 | AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 5,433,700 | |
| 12 | CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES ☐ | |
| 13 | PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 3.5% | |
| 14 | TYPE OF REPORTING PERSON PN | |
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Page 4 of 8 – SEC Filing
| 1 | NAME OF REPORTING PERSONS Elliott International Capital Advisors Inc. | |
| 2 | CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*(a) ☒ (b) ☐ | |
| 3 | SEC USE ONLY | |
| 4 | SOURCE OF FUNDS OO | |
| 5 | CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) ☐ | |
| 6 | CITIZENSHIP OR PLACE OF ORGANIZATION Delaware | |
| NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH | 7 | SOLE VOTING POWER – 0 – |
| 8 | SHARED VOTING POWER 5,433,700 | |
| 9 | SOLE DISPOSITIVE POWER – 0 – | |
| 10 | SHARED DISPOSITIVE POWER 5,433,700 | |
| 11 | AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 5,433,700 | |
| 12 | CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES ☐ | |
| 13 | PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 3.5% | |
| 14 | TYPE OF REPORTING PERSON CO | |
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Page 5 of 8 – SEC Filing
The following constitutes Amendment No. 1 to the Schedule 13D filed by the undersigned (“Amendment No. 1”). This Amendment No. 1 amends the Schedule 13D as specifically set forth herein.
| Item 3. | Source and Amount of Funds or Other Consideration. |
Item 3 is hereby amended and restated to read as follows:
| Elliott Working Capital | The aggregate purchase price of the shares of Common Stock directly owned by Elliott is approximately $126,105,226. |
| Elliott International Working Capital | The aggregate purchase price of the shares of Common Stock directly owned by Elliott International is approximately $256,190,013. |
The Reporting Persons may effect purchases of shares of Common Stock through margin accounts maintained for them with prime brokers, which extend margin credit as and when required to open or carry positions in their margin accounts, subject to applicable federal margin regulations, stock exchange rules and such firms’ credit policies. Positions in shares of Common Stock may be held in margin accounts and may be pledged as collateral security for the repayment of debit balances in such accounts. Since other securities may be held in such margin accounts, it may not be possible to determine the amounts, if any, of margin used to purchase shares of Common Stock.
Item 4. Purpose of Transaction.
Item 4 is hereby amended to add the following:
On May 4, 2016, the Reporting Persons delivered a letter to the Issuer’s Chairman, Chief Executive Officer, and Board of Directors, a copy of which is attached as Exhibit 99.1 hereto and is incorporated by reference herein. In the letter, the Reporting Persons expressed their views regarding the Issuer’s business and urged the Issuer’s Board of Directors to implement the Reporting Persons’ value-maximizing plan to improve the Issuer’s business and drive significant stockholder value.
The Reporting Persons do not have any plans or proposals regarding the Issuer, its assets or its securities, except as set forth in the letter and discussed herein.
| Item 5. | Interest in Securities of the Issuer. |
Item 5(a) is hereby amended and restated to read as follows:
(a) Elliott, Elliott International and EICA collectively have combined economic exposure in the Issuer of approximately 8.6% of the shares of Common Stock outstanding.
The aggregate percentage of Common Stock reported owned by each person named herein is based upon 155,276,390 shares of Common Stock outstanding as of January 29, 2016, which is the total number of shares of Common Stock outstanding as reported in the Issuer’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on February 3, 2016.
As of the close of business on May 3, 2016, Elliott beneficially owned 2,676,300 shares of Common Stock, constituting approximately 1.7% of the shares of Common Stock outstanding.
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Page 6 of 8 – SEC Filing
As of the close of business on May 3, 2016, Elliott International beneficially owned 5,433,700 shares of Common Stock, constituting approximately 3.5% of the shares of Common Stock outstanding. EICA, as the investment manager of Elliott International, may be deemed to beneficially own the 5,433,700 shares of Common Stock beneficially owned by Elliott International, constituting approximately 3.5% of the shares of Common Stock outstanding.
Collectively, Elliott, Elliott International and EICA beneficially own 8,110,000 shares of Common Stock, constituting approximately 5.2% of the shares of Common Stock outstanding.
Collectively, Elliott, Elliott International and EICA have economic exposure comparable to approximately 3.4% of the shares of Common Stock outstanding pursuant to Derivative Agreements (as defined below), as disclosed in Item 6.
Item 5(c) is hereby amended to add the following:
(c) The transactions effected by the Reporting Persons during the past sixty days are set forth on Schedule I attached hereto. Unless otherwise indicated, all of such transactions were effected in the open market.
| Item 6. | Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer. |
Item 6 is hereby amended and restated to read as follows:
Elliott, through The Liverpool Limited Partnership, a Bermuda limited partnership and a wholly-owned subsidiary of Elliott (“Liverpool”), and Elliott International have entered into notional principal amount derivative agreements (the “Derivative Agreements”) in the form of cash settled swaps with respect to 1,727,550 and 3,507,450 shares of Common Stock of the Issuer, respectively (representing economic exposure comparable to approximately 1.1% and 2.3% of the shares of Common Stock of the Issuer, respectively). Collectively, the Derivative Agreements held by the Reporting Persons represent economic exposure comparable to an interest in approximately 3.4% of the shares of Common Stock outstanding. The Derivative Agreements provide Elliott and Elliott International with economic results that are comparable to the economic results of ownership. The Derivative Agreements are not shares of Common Stock and do not provide the Reporting Persons with the power to vote or direct the voting or dispose of or direct the disposition of the shares that are referenced in the Derivative Agreements (such shares, the “Subject Shares”). The Reporting Persons disclaim beneficial ownership in the Subject Shares. The counterparties to the Derivative Agreements are unaffiliated third party financial institutions.
| Item 7. | Material to be Filed as Exhibits. |
Item 7 is hereby amended to add the following exhibit:
| 99.1 | Letter to the Issuer’s Chairman, Chief Executive Officer, and Board of Directors, dated May 4, 2016. |
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Page 7 of 8 – SEC Filing
SIGNATURES
After reasonable inquiry and to the best of its knowledge and belief, each of the undersigned certifies that the information with respect to it set forth in this statement is true, complete and correct.
Dated: May 4, 2016
| ELLIOTT ASSOCIATES, L.P. | ||||||
| By: Elliott Capital Advisors, L.P., as General Partner | ||||||
| By: Braxton Associates, Inc., as General Partner | ||||||
| By: | /s/ Elliot Greenberg | |||||
| Elliot Greenberg, | ||||||
| Vice President | ||||||
| ELLIOTT INTERNATIONAL, L.P. | ||||||
| By: Elliott International Capital Advisors Inc., | ||||||
| as Attorney-in-Fact | ||||||
| By: | /s/ Elliot Greenberg | |||||
| Elliot Greenberg, | ||||||
| Vice President | ||||||
| ELLIOTT INTERNATIONAL CAPITAL ADVISORS INC. | ||||||
| By: | /s/ Elliot Greenberg | |||||
| Elliot Greenberg, | ||||||
| Vice President | ||||||
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Page 8 of 8 – SEC Filing
SCHEDULE I
Transactions of the Reporting Persons Effected During the Past Sixty Days
The following transactions were effected by Elliott Associates, L.P. in the Common Stock during the past 60 days:
| Date | Security | Amount of Shs. Bought / (Sold) | Approx. Price ($) Per Share |
| 03/09/16 | Common Stock | (71,206) | 45.3400 |
The following transactions were effected by Elliott International, L.P. in the Common Stock during the past 60 days:
| Date | Security | Amount of Shs. Bought / (Sold) | Approx. Price ($) Per Share |
| 03/09/16 | Common Stock | 71,206 | 45.3400 |
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