Pershing Square’s parry-riposte in the Ceridian battle may work, but still, the hurdles are high.

The activist New York-based hedge fund stepped back from pushing for control of Ceridian’s board in lieu of campaigning for just three board seats.

“Winning a proxy fight for board seats is a lot easier than a proxy fight for board control,” said John Laide, research manager at SharkRepellent.net, a unit of FactSet Research Systems Inc. “You’re much more likely to get the proxy advisory firms to recommend your slate if you’re only going for representation instead of a wholesale change in the board. They’ll often take the opinion that a fresh perspective would be beneficial as opposed to everyone … being ousted.”

Shareholders are set to vote on a sale of the company on September 12 to buyout firm Thomas H. Lee and Fidelity National Financial Inc, which are offering $36 a share. Pershing originally opposed the deal but threw his weight behind it when it became apparent that turbulent market conditions made a counter bid at a higher price unlikely. On Friday, he also scaled back plans for the number of seats he is pushing for on the board, to three seats instead of all seven. The move came as another hedge fund pushed for changes at HSBC.

Laide said the strategy behind Pershing’s move is a kind of insurance in case the deal doesn’t go through. 

“When they started, they were soliciting votes against the merger,” said Laide. “They’re now supporting it but are still going for minority representation in case the merger proposal is defeated, so they have representatives on the board to make sure they’re going in the right direction should the merger not be approved.”

Data from SharkRepellent shows that while the success rate of proxy battles has in general hovered in favor of dissidents for the past three years, the success rate of fights where dissidents specifically target at least one seat is 32 percent this year.

(Photo: Reuters)