Ackman turns back on J.C. Penney, sells entire stake in retailer
By Svea Herbst-Bayliss
(Reuters) - Hedge fund manager William Ackman, the biggest shareholder in J.C. Penney Co Inc, said on Monday he had sold his entire stake after his campaign to overhaul the retailer failed.
Ackman's Pershing Square Capital Management sold 39.1 million shares, or 18 percent of the company, to Citigroup Inc, which is now offering the shares to other investors, the company and the $11 billion hedge fund said in separate announcements.
The decision by Ackman, who stepped off the board two weeks ago amid a growing rift over corporate strategy, to dump his stake pushed Penney's shares down 2.6 percent to $13 in after-hours trading.
Pershing Square said in a statement Citi's offering of J.C. Penney common stock was priced to the public at $12.90 per share and was expected to close on August 30.
The sale marks the end to Ackman's three-year campaign to breathe new life into the Plano, Texas-based retailer. He recruited a new chief executive to upgrade merchandise and make stores more attractive to shoppers.
But store sales fell 25 percent in the last fiscal year and the company's share price has dropped 32 percent since January.
For Ackman's hedge fund, which had boasted average annual returns of 20 percent over the last decade, the Penney investment weighed on performance, prompting some institutional investors to seek meetings with the manager so he could clarify his plans.
Ackman has lost hundreds of millions of dollars on his bet since first buying the shares when they traded at $20.01. Continued...