J.C. Penney investor Bill Ackman sells his stake, loses $400 million
By ANNE D'INNOCENZIO Associated Press on Aug 29, 2013, at 2:33 AM Updated on 8/29/13 at 5:56 AM
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NEW YORK - It's official.
J.C. Penney's biggest investor and former board member Bill Ackman is through with the retailer, selling his entire 18 percent stake to Citigroup and taking a more than $400 million bath on the deal.
In a regulatory filing Wednesday, Ackman disclosed that he sold 39.1 million shares to the bank for $12.60 per share or $492.3 million. That's nearly half of the average $25 a share that he paid when he first invested in Penney in 2010.
Penney and Ackman's hedge fund, Pershing Square Capital Management, said Monday that Ackman planned to sell all of his Penney holdings and named Citigroup as the underwriter. Until the latest filing, it wasn't made public what Citigroup Inc. had paid before re-offering the shares on the market for $12.90 each.
The move comes more than two weeks after Ackman resigned from Penney's board as part of a deal to resolve an unusually public battle between the activist investor and the struggling department store operator.
Plano, Texas-based J.C. Penney Co. Inc. is trying to recover from a botched transformation plan that was spearheaded by its former CEO Ron Johnson, who was ousted in April after 17 months on the job.
Ackman quit the board on Aug. 13 after he went public with statements saying he'd lost confidence in the board and that Chairman Thomas Engibous should be replaced.
Ackman and the board also were bickering over how quickly CEO Mike Ullman should be replaced. Ullman was Johnson's predecessor but was rehired when Johnson was fired.
Ackman joined Penney's board in February 2011 and had pushed the board to hire Johnson, a mastermind of Apple Inc.'s successful stores. Under Johnson's leadership, Penney got rid of most sales in favor of everyday low prices. He also brought in hip new brands and planned to remake the store as an indoor mini mall of sorts with 100 different in-store shops in an effort to woo trendier, more affluent shoppers. But those efforts alienated Penney's loyal customers.
Penney ended up recording nearly $1 billion in losses and a 25 percent drop in revenue in the fiscal year that ended Feb. 2.
Original Print Headline: Investor exits Penney, loses $400 million
Retail
Incredible Pizza Co. will jump into the indoor trampoline park business later this year.
A recurrent favorite, Wal-Mart Stores Inc. once again ranks among top picks of investing professionals who like the retailer's focus on international expansion and growth of its smaller store formats.
