Bill Ackman’s Pershing Square Capital Management LLP won two seats on the board of Zoetis. The announcement comes just two months after the activist investor built a more than 8% stake in the animal health company.

Bill Ackman Wins Two Board Seats At Zoetis

Zoetis’ poison pill

Last year proved to be Pershing Square’s best year, as Pershing Square Holdings, one of the four hedge funds run by the firm, netted a 40.4% return. Among PSCM’s long positions are Zoetis, Allergan, and Air Products & Chemicals.

Bill Ackman first unveiled his investment in Zoetis Inc. in November. Responding to the activist investor’s investment, the animal health company’s board of directors adopted a one-year shareholder rights plan, also known as a “poison pill.

The animal health company 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 as not being in the best interests of shareholders and doesn’t reflect Zoetis’ unique industry position and long-term value.

Bill Ackman: Zoetis has scope to trim expenses

Ackman sees a large opportunity to trim expenses at Zoetis, according to people who attended a meeting at which he spoke in November. However, Zoetis has said its costs aren’t comparable to other drugmakers with animal health units, as it’s a stand-alone company.

However, in a statement Wednesday, Zoetis said Bill Doyle, a member of Pershing Square’s investment team, has been appointed to the board, and another director will be named later. Bill Ackman’s firm agreed to use its 8.3% stake to back Florham Park, N.J.-based Zoetis’ other board members.

Welcoming Doyle’s induction to the board, Juan Ramón Alaix, chief executive of Zoetis, said Doyle brings significant expertise and relevant industry and operational experience to Zoetis and that he will provide valuable insight and perspectives to enhance the company’s position as the world leader in animal health.

Bill Ackman built a $2 billion stake in the animal health company in November, along with hedge fund Sachem Head Capital Management. Some believe the activist investor could push Zoetis to sell itself to a larger drug maker.

As part of Wednesday’s agreement, Pershing Square agreed with Zoetis’ management to select a “mutually agreeable” director. Doyle will join the animal health company’s corporate governance committee as the company expands the size of its board to 10 people. The second director, who hasn’t yet been named, will serve on the compensation committee. Ackman also agreed to standstill restrictions and entered into a confidentiality agreement.