Zoetis Inc (NYSE:ZTS) has entered into an agreement with Bill Ackman’s Pershing Square to appoint William Doyle to the company’s board of directors, a new filing with the U.S. Securities and Exchange Commission showed.
Mr. Doyle is a member of Pershing Square’s Investment Team, and his appointment will expand the size of company’s board to ten from nine directors. According to the filing, Pershing Square is the largest shareholder of Zoetis Inc (NYSE:ZTS), in which the fund holds 41.82 million shares, representing 8.3% of common stock shares outstanding.
Pershing Square is a New York-based hedge fund founded and run by Bill Ackman. Mr. Ackman is a long term value investor, who takes advantage of short term downward moves in prices. He is particularly successful at special situations investments. Pershing Square had around $12 billion in assets under management in early 2014. The fund lost 1.1% in 2011 but gained 12.4% in 2012, 9.7% in 2013. Pershing Square has a very concentrated portfolio. As of the end of September 2014, the value of the fund’s equity portfolio totaled $13.4 billion. Allergan Inc. (NYSE:AGN), Canadian Pacific Railway Limited (USA) (NYSE:CP), and Air Products & Chemicals Inc. (NYSE:APD) were represented as the largest shareholders of Zoetis Inc (NYSE:ZTS) as of the end of September 2014.
Bill Ackman is the notorious investor. Last month, in an interview on Bloomberg Television, Mr. Ackman has discussed his investment strategy, as well as provided its opinion regarding oil prices decline and mentioned that he was considering investing in the UK retailer Tesco PLC (LON:TSCO), among other things. During his interview with Bloomberg TV’s Francine Lacqua and Guy Johnson, Mr. Ackman stated that the main target of Pershing Square’s investment strategy are high quality companies that run a predictable business model and are capable of generating free cash flow. Moreover, Pershig Square also prefers to invest in companies that are not exposed to commodity prices and have unique assets and long-term contracts, among other factors.
Mr. Ackman tried to acquire Allergan, Inc. (NYSE:AGN) jointly with Valeant Pharmaceuticals Intl Inc (NYSE:VRX). However, even though, after a pretty rough proxy fight, Allergan was sold to Actavis plc (NYSE:ACT) instead of Valeant. In November, Mr. Ackman’s Pershing Square disclosed taking a massive position in Zoetis Inc (NYSE:ZTS). At that time, we made an assumption that Pershing Square might pursue Zoetis Inc (NYSE:ZTS) into selling itself to Valeant Pharmaceuticals Intl Inc (NYSE:VRX).