A three-way legal drama, involving some high-level testimonials at the New York Supreme Court, played out since the trial began on February 20, 2013 with appearance of CEOs Terry Lundgren of Macy's, Ron Johnson of J.C. Penney and Martha Stewart of Martha Stewart Living Omnimedia Inc. Since 2007, Macy's has been exclusively selling many of Martha Stewart's home merchandises such as cookware and utensils, which J.C. Penney made a coup in December 2011 taking use a loophole in the Macy's exclusive agreement by having the home diva namesake to open its store within JCP. JCP also bought a stake of 17 percent in Martha Stewart Living by investing $38.5 million. Macy's filed a lawsuit against Martha in January 2012 and JCP three months later. On March 7, 2013, Judge Jeffrey Oing asked three parties to participate in mediation between now and April 8, 2013, next hearing date.
On late April 8, 2013, Ron Johnson was forced out as his trend-setting model of launching store-within-store concept without enough testing led to 25 percent loss in revenue over the past year, and more so during critical holiday quarter, and nearly $1 billion in loss. Former CEO Myron Ullman was brought back to lead the 111-year retail chain out of financial and sales morass.
On April 12, 2013, Judge Jeffrey Oing gave J.C. Penney a break from the dilemma over a three-way legal drama, involving Penney, Macy's and Martha, by letting JCP sell Martha-branded housewares to sell. Oing gave ouster of Johnson, who had orchestrated the deal with Stewart, one of the reasons for go-ahead.
After a public spat with the 111-year-old retailer's board in general and Chairman Tom Engibous in particular over finding a permanent CEO to replace Myron Ullman sooner, the activist investor and Pershing Square Capital head Bill Ackman resigned from the board on August 13, 2013 in what could be termed as a mutually agreed exit. Ackman's 17.7 percent stake in J. C. Penney will be bought over by Citigroup, which may sell the shares later when the stock prices will go up and reap a healthy profit, according to an announcement by Ackman himself on August 26, 2013. Back in 2010, Ackman and Vornado Realty Trust's Steven Roth disclosed that between them they had owned about 26 percent of Penney stake. Both Ackman and Vornado Chairman Roth were added to the J.C. Penney board without proxy later in 2010. In March 2013, when the then-CEO Ron Johnson was battling for his survival, Roth sold 10 million shares, leaving only 6.1 percent stakes under the control of Vornado. After Bill Ackman's August 13, 2013, resignation from the board, former Macy's Vice Chairman Ronald W. Tysoe was added to the board.
On September 3, 2013, Dallas-based hedge fund Hayman Capital , run by the Fort Worth billionaire Kyle Bass, disclosed that it had bought 5.2 percent stake in Penney. Also on September 3, 2013, New York-based Glenview Capital Management founded by Lawrence Robbins announced that it had acquired more than 20 million, or 9.1 percent, of JC Penney shares. These two high-profile activities related to Penney shares came on the top of August 30, 2013, high-stake disclosure by another New York-based hedge fund, Perry Corp led by Richard Perry, that it had bought an additional 3 million shares for $12.90 apiece, thus raising its stake in the retailer to 8.62 percent. Last month Penney board approved a so-called poison pill that would bar anyone to acquire more than 10 percent of the retailer.
In the backdrop of a challenging market and customer reluctance to return to its stores in expected numbers, J.C. Penney Co. on September 27, 2013 announced to sell 84 million of shares at a price of $9.65 per share by October 1, 2013 to cushion its liquidity position during the all important holiday season. The offering of 84 million shares will fetch $810.6 million, and then the Goldman Sachs, the underwriter for this stock offering, will have flexibility of selling an additional 12.6 million of shares for $9.65 per share within the next 30 days.
On late April 8, 2013, Ron Johnson was forced out as his trend-setting model of launching store-within-store concept without enough testing led to 25 percent loss in revenue over the past year, and more so during critical holiday quarter, and nearly $1 billion in loss. Former CEO Myron Ullman was brought back to lead the 111-year retail chain out of financial and sales morass.
On April 12, 2013, Judge Jeffrey Oing gave J.C. Penney a break from the dilemma over a three-way legal drama, involving Penney, Macy's and Martha, by letting JCP sell Martha-branded housewares to sell. Oing gave ouster of Johnson, who had orchestrated the deal with Stewart, one of the reasons for go-ahead.
After a public spat with the 111-year-old retailer's board in general and Chairman Tom Engibous in particular over finding a permanent CEO to replace Myron Ullman sooner, the activist investor and Pershing Square Capital head Bill Ackman resigned from the board on August 13, 2013 in what could be termed as a mutually agreed exit. Ackman's 17.7 percent stake in J. C. Penney will be bought over by Citigroup, which may sell the shares later when the stock prices will go up and reap a healthy profit, according to an announcement by Ackman himself on August 26, 2013. Back in 2010, Ackman and Vornado Realty Trust's Steven Roth disclosed that between them they had owned about 26 percent of Penney stake. Both Ackman and Vornado Chairman Roth were added to the J.C. Penney board without proxy later in 2010. In March 2013, when the then-CEO Ron Johnson was battling for his survival, Roth sold 10 million shares, leaving only 6.1 percent stakes under the control of Vornado. After Bill Ackman's August 13, 2013, resignation from the board, former Macy's Vice Chairman Ronald W. Tysoe was added to the board.
On September 3, 2013, Dallas-based hedge fund Hayman Capital , run by the Fort Worth billionaire Kyle Bass, disclosed that it had bought 5.2 percent stake in Penney. Also on September 3, 2013, New York-based Glenview Capital Management founded by Lawrence Robbins announced that it had acquired more than 20 million, or 9.1 percent, of JC Penney shares. These two high-profile activities related to Penney shares came on the top of August 30, 2013, high-stake disclosure by another New York-based hedge fund, Perry Corp led by Richard Perry, that it had bought an additional 3 million shares for $12.90 apiece, thus raising its stake in the retailer to 8.62 percent. Last month Penney board approved a so-called poison pill that would bar anyone to acquire more than 10 percent of the retailer.
In the backdrop of a challenging market and customer reluctance to return to its stores in expected numbers, J.C. Penney Co. on September 27, 2013 announced to sell 84 million of shares at a price of $9.65 per share by October 1, 2013 to cushion its liquidity position during the all important holiday season. The offering of 84 million shares will fetch $810.6 million, and then the Goldman Sachs, the underwriter for this stock offering, will have flexibility of selling an additional 12.6 million of shares for $9.65 per share within the next 30 days.
