J.C. Penney filed a registration statement with the Securities and Exchange Commission late Monday that would allow for activist investor Bill Ackman to unload his entire stake in the company via a secondary stock offering.
According to the J.C. Penney’s filing, Ackman and various Pershing Square investment vehicles he controls plan to sell roughly 39 million shares representing 17.7% of the company’s 220.5 million outstanding shares.
Ackman’s decision to sell his entire stake at once follows an earlier plan that was to involve a more gradual approach to divesting his position with multiple offerings. Ackman had accumulated a large stake in J.C. Penney several years earlier and agitated for a change in senior leadership thinking J.C. Penney was ripe for a transformation that would yield increased profitability and a higher valuation. His handpicked successor, former Apple retail executive Ron Johnson, pursued strategies that resulted in sales declines that had the company heading toward bankruptcy.
Johnson was ousted earlier this year and J.C. Penney brought back Myron Ullman as interim CEO, a move that displeased Ackman who engaged in a public show of his disapproval that the company wasn’t moving fast enough to locate a permanent replacement for Johnson. Shortly thereafter Ackman decided to relinquish his seat on the board.
Based on Monday’s closing price of $13.35, Ackman’s stake in J.C. Penney is valued at $522 million.