Ceridian Corporation's (NYSE:CEN) selling price may not be enough to satisfy one of Wall Street's best hedge funds. Bill Ackman's Pershing Square voiced its opposition to the bid today calling it low and suboptimal for Ceridian shareholders. The activist hedge fund also said it has hired financial and legal advisors as it intends to pursue one or more value-maximizing alternatives.

Ackman's hedge fund had been pushing for the company to either sell itself or divest its Comdata division for many months and recently went hostile a proxy contest. To avoid problems, the company quickly found a consortium of buyers willing to purchase the company for $36 per share. The activist hedge fund believes that this was an illsuited response to their proxy contest and that the price is simply too low.

Consequently, Pershing Square recommended a series of alternatives aimed at increasing shareholder value even if it does't equate to a direct sale of the company. First, Ackman suggested that the company continue to shop itself in an attempt to get a higher price. Secondly, he recommended that the company simply spin-off its Comdata unit. And if all else failed, he recommended that the company consider a recapitalization, dividend or self-tender transaction where significant value could be returned to shareholders.

So, what does this all mean for shareholders? Well, the worst case scenario is a sale of the company at $36 per share. Ceridian may have standstill orders on the table that it could consider at higher prices. Also, if the company took one of the other alternatives available to it, including a spin-off of Comdata or a recapitalization/dividend/buyback, significant long-term value could be unlocked for shareholders. A spin-off would also create great opportunities for investment in the new entity. Combined, these are all reasons why CEN is a stock worth following while this situation unfolds!

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