Activist investor Bill Ackman of Pershing Square Capital Management completed its forward purchase contracts and underlying settlement puts to acquire shares of Zoetis Inc (NYSE:ZTS) based on his latest 13D filing with the Securities and Exchange Commission (SEC).
Based on the filing, Ackman beneficially owns 41,823,145 shares or 8.3% of the outstanding shares of Zoetics Inc (NYSE:ZTS). The stake includes 191,296 shares underlying forward purchase contracts held by PS II and 62,203 shares underlying delayed settlement puts written by PSII and exercised by the counter party.
Ackman’s filing showed that the Pershing funds other than PS II acquired more than 27.7 million shares of Zoetix Inc (NYSE:ZTS) with an aggregate price of $1,042,663,169 on December 4, pursuant to the forward purchase contracts.
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In addition, Ackman’s fund’s other than PS II bought more than 8.23 million shares of the animal-health company with an aggregate price of $308,988,099 on December 9, pursuant to the delayed settlement put.
Zoetis adopted poison pill plan after Ackman’s investment
Ackman first disclosed his investment in Zoetis Inc (NYSE:ZTS) last month. In response to the activist investors’ investment, the board of directors of the animal-health company adopted a one-year shareholder rights plan or poison pill.
Zoetis Inc (NYSE:ZTS) said the poison pill was intended to protect the company and its shareholders from any attempt to take control by any entity, which is determined by the board of directors that is not in the best interest of shareholders and does not reflect Zoetis’ unique industry position and long-term value.
The animal-health company issued one right for every share of common stock held by its shareholders at the close of business on November 24 under its shareholders rights plan. Zoetis Inc (NYSE:ZTS) the rights will become exercisable only once a shareholder acquires 15% or more stake in the company. The shareholder will be entitled to purchase one one-thousandth of a share of preferred stock at an exercise price of $200, subject to adjustment as provided in the plan.
Zoetis approved $500 million shares buyback
The board of directors of Zoetis Inc (NYSE:ZTS) also approved a $500 million stock buyback program as part of its capital allocation plans last month.
Paul Herendeen, executive vice president and CFO of Zoetis Inc (NYSE:ZTS) recently said, “We remain focused on investing capital internally to help grow the business; completing complementary business development activities that can generate additional value; and returning capital to shareholders as part of our total value proposition.”
There had been reports that Ackman or his activist protégé hedge fund, Sachem head, likely met with the management of the animal-health company suggested ways to improve shareholder value.
Ackman is having a terrific year, up 41.2% through November.