Ackman quits J.C.Penney board, removing distraction
By Phil Wahba and Matthew Goldstein
(Reuters) - Hedge fund billionaire Bill Ackman's two-year campaign to transform department store J.C. Penney came to an abrupt end on Tuesday with his decision to step down from the board, after a weeklong public spat with fellow board members.
Ackman's decision to leave comes after a failed two-year attempt by his $11.2 billion hedge fund to remake Penney into an upscale retail chain and a week of public fighting with other board members, including interim CEO Officer Myron (Mike) Ullman.
People close to Ackman and the retailer said his decision to leave the board was necessary for Penney to focus on its operations and continue the search for a new chief executive.
Ackman agreed to step down on Monday night, and the move removes a major distraction as Penney prepares for the holiday season. Some retail analysts said the public feuding threatened to unnerve vendors and lenders.
Penney's shares closed down 3.7 percent at $12.68 on the New York Stock Exchange.
"Bill Ackman has the done the right thing by stepping down from the board, under duress no doubt, and now Mike Ullman has pressure to perform," said David Berman, whose Durban Capital hedge fund specializes in retail stocks.
Ackman's experience in pushing for change at Penney, a chronic underperformer in U.S. retailing, contrasts with the improved performance of Canadian Pacific Railway Ltd after he led a proxy fight that forced out the railroad's management.
Ackman's Pershing Square Management Capital Management started buying Penney shares nearly three years ago to the day, paying an average of $22 for 39 million shares. The hedge fund now holds nearly 18 percent of Penney's stock. Continued...