Activist hedge-fund investor William Ackman reversed his stance Tuesday and said he will back the $5.3 billion buyout of Ceridian Corp. because disruptions in the credit markets have made a higher bid unlikely.
Ackman said he will support a $36-per-share buyout offer for the human-resources company from Thomas H. Lee Partners LP and Fidelity National Financial Inc.
The bid is 5.3 percent more than the stock’s closing price May 30, the day of the offer. Since then, losses on debt backed by subprime mortgages have led banks to reduce lending, curbing the supply of money for leveraged-buyout firms.
Investors have rejected bond and loan packages for buyouts of companies including Alliance Boots Plc and Chrysler.
“In light of current market conditions and after the completion of our review process, we are confident that the buyout offer at $36 per share is the highest all-cash price reasonably attainable for the company,” Ackman said in a statement.
Ceridian, which manages employee programs for GlaxoSmithKline Plc and Teradyne Inc., fell 30 cents to $32.71 in New York Stock Exchange composite trading. The shares have dropped 4.3 percent since Thom as H. Lee and Fidelity disclosed the bid, but the stock has gained 17 percent this year.
Ackman’s Pershing Square Capital Management LP, based in New York, had hired investment banker Lazard Ltd. two months ago to seek bids to top the offer for Minneapolis-based Ceridian.
