William Ackman’s Pershing Square Capital Management lost at least $450 million on its investment in J.C. Penney Co. Inc. — and it could have been even higher.
Pershing Square said Tuesday that the sale of its 39 million shares of Penney’s has priced at $12.90 a share. The offering is expected to close on Friday.
Citigroup acted as sole book-running agent and underwriter.
Ackman’s share purchases ranged in price from $20 to $29, with the midrange at $24.50. The pricing at $12.90 a share is a 47.3 percent drop from the average purchase price of $24.50. That represents at least a $452.4 million loss on his investment, although it is likely higher if more shares were initially purchased closer to the $29-a-share range.
Earlier this month, Ackman and Penney’s board were involved in a directors’ conflict in which Ackman sought the ouster of board chairman Thomas Engibous and the acceleration of a chief executive officer search to replace current ceo Myron “Mike” Ullman 3rd. The activist investor saw Ullman as an interim chief and believed the board was dragging its feet when it came to finding a successor. He also had concerns about the company’s capital investment plans, cost control, inventory management and business planning processes. Ackman also added fuel to the fire when he made public letters he sent to the board outlining his dissatisfaction with the pace of change.
The activist investor lost that fight when Penney’s board decided they are in full support of the efforts of both Engibous and Ullman.
Ackman in turn resigned from Penney’s board.
Penney’s will not receive any proceeds from the offering.
Shares of the retailer were down 1.4 percent Tuesday to $13.17. Nearly 99.1 million shares changed hands, compared with a three-month average trading volume of 13 million shares.
“Azzedine has been one of the biggest influences in my life. He has always been such a strong, loving, fatherly figure to me. I call him Papa. His designs are indescribably unique, they are pieces of art. He knew how to make the female form look its loveliest. I have so many memories of him; my favorite might be during my first show with him in Paris. He liked me and he wanted to help me get more work. He called all his friends at Kenzo and Comme des Garcons, and asked them to book me. They said, ‘But she can’t walk!’ And he said, ‘but she has such a great ass!' His friendship and support has been the great privilege of my career. I can't imagine life without him. Repose en paix mon Papa.” - @stephanieseymour tells @wwd. #wwdfashion (📷: @steveeichner) #alaia #azzedinealaia
Azzedine Alaïa, flanked by two of his closest friends, models Stephanie Seymour and Naomi Campbell.
He designed Seymour’s dress for her 1995 wedding to Peter Brant, and treated Campbell (who famously called him Papa), like a daughter. For more on the legendary designer, tap the link in bio. #wwdfashion #alaia #azzedinealaia
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