William Ackman's Pershing Square To Divest J.C. Penney Stake

(RTTNews) - Hedge-fund Pershing Square Capital Management LP, said Monday it is selling the entire 18 percent stake in J.C. Penney Co. (JCP) after its founder William Ackman failed in his attempt to install a new chief executive at the beleaguered retailer.

Shares of J.C. Penney slipped 2.8 percent in after-hours trade on the New York Stock Exchange, after ending the day at $13.35, down $0.15 or 1.11%.

Ackman, the largest stakeholder in J.C. Penney with ownership of over 39 million shares, has been critical of the retailer's flagging fortunes and lack of the much promised turn-around after the return of chief executive Myron "Mike" Ullman, III.

Earlier this month, Ackman quit the company's board, which pulled him up for releasing confidential boardroom deliberations.

Ackman's stake-sale in J.C. Penney was somewhat anticipated, after he had recently warned of such a move. That prompted J.C. Penney to announce Thursday a poison pill to preempt a coercive takeover.

Citigroup Inc. (C) is acting as the book running manager and underwriter on sale of J.C. Penney shares by Ackman.

In its recent quarter, J.C. Penny, based in Plano, Texas, reported a net loss that widened to $586 million from $147 million last year, with sales down 12 percent. Results also reflected one-time charges.

Shares of J.C. Penney closed Monday at $13.35, down $0.15 or 1.11%, on a volume of 11.9 million shares. In after hours, the stock dropped $0.37 or 2.77%.