NEW YORK (AP) — J.C. Penney Company, Inc. (NYSE:JCP)‘s biggest investor, William Ackman, plans to sell his entire stake in the struggling department store operator for about $504.4 million — a loss of around $470 million from what he paid for it.
The move comes two weeks after Ackman resigned from J.C. Penney Company, Inc. (NYSE:JCP)’s board as part of a deal to resolve an unusually public battle between the activist investor and the retailer.
Pershing Square Capital Management’s Ackman disclosed in a regulatory filing late Monday that he was going to sell his nearly 18% interest, 39.1 million shares.
On Tuesday, Ackman said that the shares will be priced at $12.90 each, about 3% below Monday’s $13.35 closing price.
Ackman acquired about 39.1 million shares of J.C. Penney Company, Inc. (NYSE:JCP) in 2010, according to filing with the Securities and Exchange Commission. He paid about $25 per share, Pershing said Tuesday.
J.C. Penney Company, Inc. (NYSE:JCP)’s shares have lost nearly 70% of their value since early February 2012 when investor enthusiasm over former CEO Ron Johnson’s retail strategy pushed the stock to around $43. That includes a 32% drop in value so far this year.
Ackman’s sell-off comes as the beleaguered chain is trying to recover from a botched transformation plan spearheaded by its former CEO that led to disastrous financial results. The board ousted Johnson in April after only 17 months on the job and rehired Mike Ullman, who had been CEO of the Plano, Texas, retailer from 2004 to late 2011.
Ackman resigned from the board on Aug. 13, after he went public with statements saying he’d lost confidence in J.C. Penney Company, Inc. (NYSE:JCP)’s board and that Chairman Thomas Engibous should be replaced. Ackman and the retailer’s board also were bickering over how quickly the company should replace Ullman, who is expected to be an interim CEO.
Ackman joined its board in February 2011 and had pushed the board to hire Johnson, a mastermind of Apple Inc. (NASDAQ:AAPL)‘s successful stores. Under Johnson’s leadership, J.C. Penney Company, Inc. (NYSE:JCP) got rid of most sales in favor of “everyday low prices.” He also brought in hip new brands and planned to remake the store as an indoor mini mall of sorts with 100 different in-store shops in an effort to woo trendier, more affluent shoppers. But those efforts alienated the company’s loyal customers.