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).
Under the agreement, Zoetis Inc (NYSE:ZTS) has appointed Mr. Doyle to its board, as well as to the corporate governance committee. The appointment of Mr. Doyle became effective February 3, 2015. Mr. Doyle is an investment team member at Pershing Square. He has more than 20 years of experience in the healthcare industry.
Scott Ferguson‘s Sachem Head Capital also made a separate filing related to Zoetis Inc (NYSE:ZTS) and Pershing Square. Pursuant to the agreement with Zoetis Inc (NYSE:ZTS), Pershing Square and Sachem Head have agreed to certain customary standstill provisions. According to the filing, Sachem Head Capital owns around 4.40 million shares of Zoetis Inc (NYSE:ZTS), the stake represents 0.9% of common stock shares outstanding.
New Jersey-based Zoetis Inc (NYSE:ZTS) is animal health company focusing on the development and manufacturing of animal health medicines and vaccines. The company has a market cap of $21.8 billion, and pays an annual dividend of $0.32, on a yield of 0.76. Zoetis Inc (NYSE:ZTS) was spun-off from drug company Pfizer Inc. (NYSE:PFE) in February 2013. Since then, the company’s stock moved up by 41.53%. On Wednesday, Zoetis Inc (NYSE:ZTS) stock is trading up by 1.03% to $43.95. The company’s stock has improved by 45.48% since February 2014. Analysts set the average target price of the stock at $46.67. The consensus average recommendation for the stock is ‘Overweight.’
Other largest shareholders of Zoetis Inc (NYSE:ZTS) include Neil Shah’s March Altus Capital Management, which reported ownership of 290,514 shares of the company at the end of the third quarter of 2014. In its latest 13F, Eclectica Asset Management, led by Hugh Hendry, disclosed holding 32,000 shares of Zoetis Inc (NYSE:ZTS).
Disclosure: none
