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Cdk Global (CDK): Paul Singer’s Activist Efforts Pay Off

Published on August 4, 2016 at 9:10 am by Insider Monkey Staff in Hedge Funds, News
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Paul Singer’s Elliott Management has registered a first victory in its activist efforts with regard to CDK Global Inc. (NASDAQ:CDK). According to an amended filing with the Securities and Exchange Commission, the company has agreed to nominate two of Elliott’s candidates for election to its Board at its next annual shareholders meeting. Elliott Management holds some 10.6 million shares of CDK, which account for 6.8% of the company’s common stock, and have further economic exposure to another 2.5% of CDK’s common stock through various derivative agreements.

CDK Global Inc. (NASDAQ:CDK) has agreed to increase the size of its Board to ten seats and nominate two of Elliott Management’s candidates for election. In exchange, Elliott has agreed to vote for the Board’s nominees. The fund’s activist efforts were first made public in May through a letter, following months of private talks. Elliott Management wrote that the company was profoundly under-managed and urged its management to focus on improving margins, establishing a share buyback program, and exploring a potential sale of the company.

Paul Singer ELLIOTT MANAGEMENT

CDK Global Inc. (NASDAQ:CDK) reported its financial results for its fourth quarter of fiscal year 2016 on Wednesday, posting a profit of $58.3 million for the period. On a per-share basis, the company posted adjusted earnings of $0.49 on $542.2 million in revenue, surpassing Wall Street’s expectations. Analysts had projected $530.9 million in revenue and earnings of $0.46 per share. The stock ended the trading session at $58.55 per share, up by 25% year-to-date. At the end of the first quarter, 41 of the funds we track had CDK in their equity portfolios, up from 34 registered three months earlier.

Follow Cdk Global Inc. (NASDAQ:CDK)

You can access the original SEC filing 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 3,395,200 0 3,395,200 0 3,395,200 2.2%
Elliott International 0 7,214,800 0 7,214,800 7,214,800 4.6%
Elliott International Capital Advisors Inc 0 7,214,800 0 7,214,800 7,214,800 4.6%

Page 1 of 9 – SEC Filing

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.  20549
SCHEDULE 13D
(RULE 13D – 101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO 13d-2(a)
(Amendment No. 2)*
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)
August 2, 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 which 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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