By  on August 21, 2011

J.C. Penney Co. Inc. is allowing activist investor William Ackman to get a bit closer, giving him the OK to take on a “synthetic long position” that could boost his stake in the retailer to up to 26.1 percent.Last year, Penney’s adopted a poison pill shareholder plan designed to fend off Ackman, who through his Pershing Square Capital Management acquired beneficial ownership of more than 39 million shares of the retailer, giving him a 16.5 percent stake. The poison pill plan was amended Friday so it would not be triggered if Ackman increased his stake as specified.Vornado Realty Trust, in conjunction with Ackman, took a 9.9 percent stake in the chain last year, and both Ackman and Vornado chairman Steven Roth took seats on the company’s board.But even as Ackman’s exposure to the firm is set to increase, his influence, in a way, is diminishing. “[The agreement] limited their voting rights, so regardless of how much they acquire, they agreed to reduce their voting stake to 15 percent, so the voting rights go down with the increase,” said a Penney’s spokeswoman of Pershing Square.Ackman has been relatively mum on his plans for Penney, though he played a role in bringing on Apple retail wiz Ron Johnson as the company’s next chief executive officer. Ackman could not be reached for comment.Shares of Penney’s gained 2.4 percent to $24.38 Friday.Although shares of Penney’s rallied 9.1 percent just before Ackman revealed his stake in the firm Oct. 8, the investor’s involvement has not kept the stock from sinking. As of Friday’s close, shares of Penny’s had fallen 14.5 percent from the rise on word of Ackman’s stake. The S&P Retail Index gained 1.5 percent over the same time frame.Penney’s first-half net profits rose 5.4 percent to $78 million as sales slipped 0.2 percent to $7.85 billion.“The second half of the year’s going to be an ugly period for them,” said Rob Wilson, analyst at Tiburon Research Group. “They’re stuck with about 400 stores in less-than-optimal real estate and actually own these stores. If they only had the 600 stores that they primarily lease in the more normal mall environments I think they’d be in a much better spot.”Wilson described this as a “structural issue” that’s challenged chairman and ceo Myron E. “Mike” Ullman 3rd and would hamper Johnson.

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