Bill Ackman has won support from Perry Capital LLC the hedge fund in his attempts to oust Tom Engihous the J.C. Penney Chairman and Mike Ullman, the CEO.
Perry reported a stake of 7.3% in the U.S. retailer and echoed the comments of Ackman that the board of directors should seek a quick overhaul of management.
The board is not functioning effectively with major personnel decisions being made without hearing the advice of all its directors, while important financial information had been withheld.
Ackman, whose company Pershing Square Capital, is the largest single shareholder of the retailer, expressed his worry in a letter to the complete board on Saturday.
Support from Perry gives Ackman, who handpicked Ron Johnson, the former CEO, more sway in his attempt to press J.C. Penney to name a new team that can implement the retailer’s turnaround plan and stop the losses of the stock.
Together Perry and Ackman own nearly 25% of the shares of stock in the retailer. Thus far, the other members of the board have stood their ground, saying that Ullman is correct for the CEO job to revive the company and that they are correctly operating the board.
One analyst said that Ackman is upset about his man, Johnson, who virtually destroyed the great retailer, and now is upset about the new person that has been brought in to replace Johnson.
Ullman, who originally return for just an interim basis in April at 66 years of age, has brought back price cutting and merchandise to attract the store’s core customers who were alienated by the strategy of Johnson, which centered round discounting and remaking the interior of the stores into different boutiques.
Ackman this week was upset because Ullman had made decisions without consulting the complete board of directors
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