Hedge Funds

William Ackman Sets Out to Sell $800 Million in Shares of Zoetis

Alexandra Stevenson and Leslie Picker
Bill Ackman selling Zoetis stake

William A. Ackman, the billionaire founder of the hedge fund Pershing Square Capital Management, is paring back a stake in a health care stock. But it is not the one that has been generating lots of negative headlines.

On Monday, Pershing set out to sell 16.85 million shares in Zoetis, the former animal health arm of Pfizer, for a price range of $46.75 to $47 per share, according to two people with direct knowledge of the deal who requested anonymity because they are not authorized to speak publicly.

The transaction is expected to be valued around $800 million and will be managed by Bank of America Merrill Lynch and Credit Suisse. Pershing will continue to own 25 million shares in the company.

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WilliamAckman Sets Out to Sell $800 Million in Shares of Zoetis

The hedge fund paid $1.5 billion for an 8.5 percent stake in Zoetis in November 2014, according a filing with the Securities and Exchange Commission. The stock has since gained 8.6 percent. Last year, Zoetis added William F. Doyle, a representative for Pershing Square, to its board of directors. On April 22, Pershing Square said Mr. Doyle, would step down from the board of Zoetis this week.

Bill Ackman
Adam Jeffery | CNBC

It has been a difficult year for Mr. Ackman, whose Pershing Square Holdings fund is down 18 percent, dragged down in large part by a 9 percent position in Valeant, the pharmaceutical company that has come under intense political and regulatory scrutiny. The fund has concentrated positions in a dozen companies, making the portfolio vulnerable to sharp declines in just one or two holdings. Mr. Ackman may be selling the shares to raise cash in response to investor redemption requests or in order to make a new investment.

Pershing Square trimmed its stake in another holding in March, selling 20 million shares in Mondelez International, the food and beverage company. At the time of the sale, Mondelez shares were down 7 percent for the year.

Representatives from Pershing Square and Credit Suisse declined to comment. A representative from Bank of America did not immediately respond to a request seeking comment.