Aug. 22 - J.C. Penney tries to avoid a potential hostile takeover with a one-year plan preventing any single investor from owning more than a 10 percent stake. Conway G. Gittens reports.
Just when you think things had quieted down - and J.C. Penney can focus on another rebranding and new efforts to grow sales - a new twist from the board. Apparently the Board of Directors is afraid the struggling retailer could be the target of a hostile takeover attempt. So they are adopting what is commonly referred to as a poison pill to prevent that. Now they say the one-year stockholder rights plan is not in response to any known take-over effort, but there is a major someone they might be watching: Bill Ackman, the company's largest individual stakeholder. He left the board last week after a very nasty public brawl over his desire to oust the chairman and CEOs. But he has not yet said what he will do with his 39 million shares - but if he sold now - he would lose hundreds of millions of dollars. He has an 18 percent stake- shares that could be used not only by him but by someone he sells them to- to go after the company. At this point- when it comes to JCPenney, Ackman's pretty much admitted defeat - telling investors retail investing has not been "his strong suit."