New York City Pershing Square Capital Management LP, the New York hedge-fund firm led by activist investor William Ackman, and Vornado, the real estate investment trust, have acquired control of a combined 26.7% of J.C. Penney.
Pershing Square said on Friday it had taken a 16.8% stake in the department store company, making it the retailer’s largest shareholder, while Vornado said in separate regulatory filing that it had acquired a 9.9% stake. Both said they planned to cooperate and would hold talks with management on issues including finances and strategy.
Ackman is well known for buying stock in companies he deems undervalued, particularly in the retail, restaurant and real estate industries, and urges changes he says will boost shareholder returns. His track record is mixed. In 2007, he lost a fight to gain seats on the board of Target, after calling upon the retailer to undertake complex real estate transactions and sell off its credit-card business. The Borders Group has continued to struggle despite installing new top officers at Ackman?s request.
More recently, Ackman was an architect of a reorganization plan for General Growth Properties, which is poised to emerge from a 19-month-long bankruptcy. On Friday, he was named the chairman of the Howard Hughes Co., an entity spun off from General Growth that holds properties that he believes are currently undervalued.
Industry analysts have described Ackman as a real estate-focused activist.
J.C. Penney owned 416 of the 1,108 stores it operated at the end of January, according to a company filing.