Ceridian Corporation (NYSE:CEN) announced last week that it had hired Greenhill & Co. to explore a "broad range" of strategic alternatives in a move that upset Bill Ackman, who had been pushing for a Comdata spin-off. Sources close to the situation now say that investment bankers are already reaching out to potential private equity and corporate buyers who may be interested in acquiring the entire company - not just Comdata. Bill Ackman's Pershing Square believes that shareholders could realize more benefit by unlocking the value of Comdata than selling the entire company outright. Moreover, he argues that if Comdata were spun-off before a sale of Ceridian, shareholders could benefit from a better price and greater value in the end.

The situation is a win-win for existing shareholders, however. A sale of the company would come at a significant premium to the current market price, with many investors looking for around $40/share (18%). Alternatively, Bill Ackman already filed preliminary proxy materials so if the company isn't sold we know a spin-off is likely in the cards. And with Ralph Whitworth's Relational Investors joining Ackman a few weeks ago, the odds of success are greatly enhanced. Either way, shareholders stand to gain from a sale of spin-off. Combined, these factors make CEN a stock worth watching!

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