Tuesday, 9 February 2016
Last updated 19 hours ago
Aug 13 2013 | 11:37am ET
Pershing Square Capital Management chief William Ackman has resigned from J.C. Penney Co.'s board amidst a nasty spat with his fellow directors.
Penney's said it would add two new directors in conjunction with Ackman's exit from the board. In a statement, the hedge fund manager said that "the addition of two new directors and my stepping down from the board is the most constructive way forward for J.C. Penney and all other parties involved."
Ackman earned the ire of Penney's other directors with his public call for a quick replacement of both interim CEO Myron Ullman and Chairman Thomas Engibous. Ullman was brought out of retirement in April after Penney's ousted Ackman's hand-picked CEO, former Apple Inc. marketing executive Ron Johnson, who oversaw huge losses at the retailer.
Ackman's exit comes following talks designed to end the standoff, during which Ackman agreed to stop pushing for Ullman's immediate exit. Pershing Square owns 18% of Penney's, and last month Ackman threatened to sell his stake unless the company moved more quickly to find a permanent replacement for Johnson. He then sent a letter to the board—leaked to the press—pushing for action on the matter.
Ackman also approached former Penney's CEO Allen Questrom about returning as chairman.
Among Penney's new directors is Ronald Tysoe, a former vice chairman of Federal Department Stores. The company plans to name a second new director shortly.
Ackman's departure from the board gives him more options for pursuing his agenda, perhaps through a proxy battle, or to sell his stake. Earlier this week, he won support from hedge fund Perry Capital, but since has found both Soros Fund Management and Glenview Capital Management, which hold a combined 12.2% stake, backing Ullman.